Porsche ekes out gain in landmark ipo weathering tough markets

STUTTGART: Porsche AG gained during its robust trading debut after parent Volkswagen AG (VW) set the final listing price for the sports-car maker at the upper limit in a bid to defy deep market upheaval.

The sports-car maker rose 1.8% to E84 (US$82 or RM377) in Frankfurt on the open, before slipping back to its offer price of 82.50 (RM370) a piece, the top end of VW’S initial range for the shares that valued the company at E75bil (Rm337bil).

The listing, reaping E9.4bil (Rm42bil) in proceeds for VW, is Europe’s largest initial public offering (IPO) in a decade and contends with some of the most challenging market conditions in years.

“Today, a big dream comes true for Porsche,” VW chief executive officer Oliver Blume said in a statement. “Our increased degree of autonomy puts us in a very good position to implement our ambitious goals in the coming years.”

The listing of the 911 maker is a bold move into public markets, which have been largely shut to IPOS for most of the year, with companies shying away from seeking new listings because of the European energy crisis, rising interest rates and record inflation.

The sale will help VW raise funds to plough into its electrification push, while investors get a slice of an emotional brand akin to Ferrari NV, which also managed a successful separation from parent Fiat in 2015.

“If you can pull off an IPO in such a difficult market, it shows the attractiveness of the business,” Jefferies analyst Philippe Houchois said. “Porsche is a mature, well-known business that doesn’t need to raise capital. Putting it on the market as a fully formed business – being able to pull that off is quite impressive.”

Following the trading start, against a 1.9% drop in Germany’s leading DAX Index, the preferred shares of VW declined as much as 6.2% while Porsche Automobil Holding SE, the investment company of the Porsche-piech family, slumped as much as 9.2%.

Companies raised less than Us$10bil (Rm46bil) in IPOS this year through August, an 83% drop in proceeds from the same time last year.

Porsche’s listing is set to be the largest in Europe since miner Glencore Plc raised almost Us$10bil (Rm46.5bil) in a London IPO in 2011, the data showed.

The share price puts Porsche at a valuation that’s not far from VW’S total market capitalisation - a business that comprises Audi, Skoda, Seat, and the VW brand, among others. — Bloomberg