Porsche shares soar despite weaker markets after $72 bn listing

FRANKFURT: Porsche AG shares made a strong start on Thursday after Volkswagen defied volatile markets to list the sports car brand at a valuation of 75 billion euros ($72 billion) in Germany’s second-biggest market debut ever.

Volkswagen priced Porsche AG shares at the top end of the indicated range and raised 19.5 billion euros from the flotation to fund the group’s electrification drive. Porsche AG stock was trading up 3% from the issue price of 82.50 euros at 1035 GMT.

That lifted Porsche AG’s valuation to 77.4 billion euros, close to the market capitalisation of Volkswagen as a whole, which is worth around 80.1 billion euros, and puts it ahead of rivals like Ferrari. It is Germany’s biggest listing since Deutsche Telekom in 1996.

Oliver Blume, in a interview, brushed aside concerns about his dual role as CEO of both Porsche AG and Volkswagen, saying the decision was made “very consciously”.

Porsche AG’s strong start came despite broadly weaker stock markets following red-hot German inflation data. Shares in Volkswagen and holding firm Porsche SE, which owns a blocking minority in Porsche AG, were down 4.6% and 8%, respectively, as investors switched across.

“This is not exactly a dream environment for an IPO today,” said Thomas Altmann, a wealth manager at QC Partners.

Porsche’s flotation comes as European listings are facing their worst year since 2009, as investors fret about a possible global recession amid soaring inflation, rising interest rates and the war in Ukraine.

Companies in the region have raised $44 billion from equity capital markets deals up to Sept 27, according to Refinitiv data, with only $4.5 billion from initial public offerings.

“There’s a lot to like about the company, with its aggressive electrification plans, expected strong cashflow generation and premium brand positioning in the market,” said Chi Chan, Portfolio Manager European Equities at Federated Hermes Limited.