Aston Martin skids on market debut

Aston Martin skids on market debut

The final listing price is 16% below the top of the range that Aston Martin had targeted, reflecting investor doubts about whether the carmaker should be valued in the same league as Italian rival Ferrari.

The luxury automaker, which a year ago made its first profit since 2010 and has gone bankrupt seven times, had priced its shares at 19 pounds each, giving it a market capitalization of 4.33 billion pounds ($5.63 billion). The £19 sits in the middle of the £17.50 to £22.50 guideline the company initially gave for what the shares would be offered for.

However, shares made a flat start before skidding lower to stand down 4.79 per cent at £18.09 in midday deals and failed to bounce back before the close, sparking valuation concerns among analysts.

The listing will see investors Investindustrial, Adeem Investments, Primewagon and senior management bank more than £1 billion between them as the firm floats 25% on the London Stock Exchange.

"We've taken 105 years to get to an IPO, we are not going to worry much on what the initial shares are doing as we will always look over the longer term", Chief Executive Officer Andy Palmer said in an interview with Bloomberg TV.

The luxury carmaker has a valuation of £4.33bn or £19 a share.

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Aston claims that it is on track to produce between 6200 and 6400 cars in 2018, with up to 65 percent of those being produced in the latter half of the year. In August, it was revealed that the company had a 14% increase in revenue in a single half-year, bringing total revenue up to just short of £450 million.

Aston Martin, which was founded in a small London workshop, has been transformed into an ultra-luxury brand whose classic vehicle owners include heir to the British throne Prince Charles.

The company is owned mostly by investors in Kuwait and Italy.

Palmer said he was "delighted" with the response to the IPO, describing it as a milestone for the company and pledging to deliver on growth plans. Aston Martin is one of the most hotly anticipated IPOs this year.

Germany's Daimler AG meanwhile will not sell down its Aston Martin holding as part of the IPO, and will instead convert its non-voting 4.9-per-cent stake to shares.

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