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Renk, Athens airport debuts boost Europe's IPO market

Published 02/07/2024, 12:15 PM
Updated 02/07/2024, 12:17 PM
© Reuters. The German share price index DAX graph is pictured at the stock exchange on the day of the RENK IPO in Frankfurt, Germany, February 7, 2024.     REUTERS/Staff

By Pablo Mayo Cerqueiro and Emma-Victoria Farr

LONDON/FRANKFURT (Reuters) - German defence contractor Renk and Greece's Athens International Airport (AIA) soared in their market debuts on Wednesday, in a boost for Europe's bruised IPO market.

Shares in Renk, a producer of tank gearboxes, closed at 19.65 euros Wednesday afternoon, 31% higher than the price paid by investors in a private placement ahead of the listing.

AIA initially jumped by as much as 15% and closed at 9.16 euros per share, 12% above its IPO price.

The success of Europe's first major initial public offerings this year is seen as a good omen by bankers, who are hoping for a busier 2024 after seeing volumes plummet in the last two years.

"This is the beginning of a potential reopening of the European IPO market," said Marco Guarino, executive director with Morgan Stanley's regional equity capital markets (ECM) syndicate, which co-led the Athens IPO.

"We expect the market to be busier around Easter but also later in Q2 and in Q3."

Kazakhstani airline Air Astana is in the midst of listing shares and depositary receipts on the London stock market and in its home country.

Elsewhere, German perfume retailer Douglas is preparing for an IPO as soon as this quarter, sources have told Reuters previously.

Swiss skincare giant Galderma, Italian fashion firm Golden Goose and German transport group Flix are also on bankers' lists of possible IPOs for this year.

However, not all the companies that have come to market since January have had the same reception as Renk and AIA, suggesting investor appetite for new stocks is still recovering.

Theon International, a developer of night vision and thermal imaging systems for defence and security, saw its shares dip below the IPO price in its Amsterdam trading debut on Wednesday.

The Cyprus-based group and its shareholders expect to raise as much as 154 million euros from the IPO after pricing the deal at the bottom of the targeted value range.

Renk was forced to cancel its IPO in October amid tough market conditions.

Since then, central banks have begun signalling an end to interest rate hikes, while defence stocks have recovered from a dip in the autumn.

© Reuters. The German share price index DAX graph is pictured at the stock exchange on the day of the RENK IPO in Frankfurt, Germany, February 7, 2024.     REUTERS/Staff

Ongoing talks with investors allowed the company to place 500 million euros of stock this time in around just two days, Deutsche Bank managing director Heiko Leopold said.

"We got there, and the positive share price movement shows that there is a much better market sentiment now," Malte Hopp, Citi's ECM head for Germany and Austria, added.

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