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Marine gearboxes are tested in a hall of the German gearbox manufacturer Renk in Augsburg, southern Germany, on May 8, 2023.CHRISTOF STACHE/AFP/Getty Images
German defense company Renk and Greece's Athens International Airport (AIA) soared in their market debuts on Wednesday, giving a boost to Europe's struggling IPO market.
Shares in Renk, a maker of tank transmissions, closed at 19.65 euros on Wednesday afternoon, 31% higher than the price investors paid in a private placement before the listing.
AIA initially rose as much as 15% and closed at 9.16 euros per share, 12% above the IPO price.
The success of Europe's first major IPO this year is being seen as a good omen by bankers hoping for a busier 2024 after volumes fell sharply in the last two years.
“This is the beginning of a possible reopening of the European IPO market,” said Marco Guarino, managing director of 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 the second and third quarters.”
Kazakh airline Air Astana is in the process of listing shares and depository receipts on the London Stock Exchange and in its home country.
Elsewhere, German perfume retailer Douglas is preparing for an initial public offering later this quarter, sources previously told Reuters.
Swiss skin care giant Galderma, Italian fashion company Golden Goose and German transport group Flix are also on bankers' list of possible IPOs for this year.
However, not all companies that have hit the market since January have received the same response as Renk and AIA, suggesting that investor appetite for new stocks is still recovering.
Theon International, a developer of night vision and thermal imaging systems for defense and security, saw its shares fall below their IPO price in its stock market debut in Amsterdam on Wednesday.
The Cyprus-based group and its shareholders expect to raise up to 154 million euros from the IPO, having priced the deal at the lower end of the target value range.
Renk had to cancel its IPO in October due to difficult market conditions.
Since then, central banks have signaled an end to interest rate hikes, while defense stocks have recovered from a fall fall.
Ongoing discussions with investors enabled the company to place shares worth 500 million euros in just around two days this time, said Deutsche Bank Managing Director Heiko Leopold.
“We did it, and the positive share price performance shows that market sentiment is much better now,” added Malte Hopp, Citi’s head of ECM for Germany and Austria.
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