RETAIL investors are set to be scaled back considerably in the flotation of Terra Firma’s renewable energy company Infinis, City A.M. understands.
Retail investors have been drawn to this new issue in part because of an expected dividend yield of around 6.5 per cent.
Brokers also say that retail investors who were unsuccessful in their attempt to buy shares in Royal Mail – those who applied for more than £10,000 worth of shares were rebuffed – have been looking for new companies to back.
Market sources said last night they expected Infinis shares to be priced towards the middle to low end of the price range.
Terra Firma is likely to remain a 70 per cent shareholder and has an interest in a healthy aftermarket.
The new issues market has also been slightly unnerved this week by the share price falls in recently floated companies Partnership and Just Retirement.
Terra Firma is reducing its stake in the group, which owns 147 power generating plants in the UK, to around 65 per cent as part of the transaction.
Over the past three years Infinis’ earnings have increased from £100m in 2011 to £125m in March 2013.
Infinis’ revenues are driven by the amount of electricity it exports to the grid and the price it receives for this.