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Shares in online property portal Zoopla listed today (18th June) on the London Stock Exchange to healthy demand.

Shares in the firm rose 5% above its listed price of 220p to trade at 230p in conditional trading, giving the company a market valuation of around £960mn.


Published 18/06/2014

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Shares in Zoopla enjoyed a 5% lift on its market debut as the property company, majority owned by Daily Mail and General Trust, enjoyed good demand for its initial public offering.
 
The firm’s IPO was priced at 220p, which was towards the lower end of the initial range of 200p to 250p. Yet within the first 30 minutes of conditional trading, shares rose to trade around 230p. This gives Zoopla a current market valuation of £960mn.

Premature to pop champagne

Of course, this is by no means a glorious market debut with initial optimistic investors hoping for a listing closer to 250p. This would have given the company a valuation of more than £1bn. At 230p Zoopla has a current valuation of less than half that of rival Rightmove.

Shares also remain in conditional trading which limits the ability of investors to sell their holdings. This can limit downside to a degree and hide the true intentions of buyers.

Moreover, recent IPOs have proved to be highly volatile and the successes and failures of newly listed firms in an open market should not be judged by their debut alone. AO World, Just Eat and Foxtons are just three recent IPOs that have all seen somewhat turbulent share price swings in the initial weeks following their respective market debuts.

Muted confidence

Yet an open slightly higher than the middle point of its IPO price range can give investors confidence.

There has been a swathe of IPOs that have swamped the London investment market over the course of the last six months, which has certainly sapped demand. Despite this, the issue was said to be four times subscribed, which shows healthy investor appetite.

So for now, investors should be quietly satisfied with the market debut of Zoopla.