FUND manager Jupiter returned to the London stock exchange yesterday, riding buoyant markets to debut 15 per cent above the price set in an initial public offer (IPO) last week.
Jupiter raised £220m to pay off debt and secured a £33.5m windfall for its current owners in its IPO, which priced at 165p.
By mid-morning, the shares were changing hands at 189p, after already rising above that level in grey market trading last week. The FTSE All Share was up about one per cent.
Ahead of yesterday’s debut, one head of equities at a large fund firm said Jupiter’s pricing had been “reasonable”. “Given the market conditions, we can expect an uplift to the offer price,” he had said after the valuation was announced last Wednesday.
However, some analysts warned the shares may start to pare gains as short-term investors who bought into the IPO take profits. Keith Baird, analyst at Oriel Securities, cautioned the shares were starting to look expensive given risks such as Jupiter’s concentration in the British retail investment market and heavy exposure to UK equities. “There are risks in the business... Maybe some retail investors who got in at 165p may want to flip it,” Baird said.
City A.M. Reporter