The initial public offering (IPO) of Bankia, formed from a merger between Caja Madrid and six other regional Spanish banks, was seen as a critical step in Spain’s overhaul of its financial system amid tough economic conditions.
Shares in the bank fell as much 6.4 per cent to €3.51 (£3.08) in the first hours of trading yesterday before closing unchanged at its listing price of €3.75.
Bankia, led by former International Monetary Fund head Rodrigo Rato, had initially offered its shares at €4.41-5.05 apiece and aimed to raise as much as €4.6bn.
It then cut its price at the 11th hour in a move to woo institutional investors amid a spiraling Eurozone debt crisis.
The IPO pricing valued Bankia by assets at 0.4 times the bank’s stated book value.
Shares in Spanish banks, however, responded with relief that the IPO went ahead, with Spain’s benchmark index, the IBEX-35 rising three per cent on the day and banking giant Banco Santander SA up five per cent.
"We’ve done it in the middle of a real storm in the market, created by some of the toughest financial conditions of the last decade,” Rato told reporters and bankers at Madrid’s stock exchange yesterday, referring to the listing.