By Arno Schuetze
FRANKFURT (Reuters) – Shares in loss-making German baby products retailer Windeln.de fell up to 12 percent in their stock market debut on Wednesday as investors showed little enthusiasm for the fast-growing ecommerce group.
The stock started trading below the offer price at 18 euros and slipped up to 16.36 euros in early trading, while Germany’s bluechip index traded 0.5 percent higher.
The online retailer, which makes the bulk of its sales by selling baby food to Chinese customers, had priced its shares the day before at 18.50 euros after offering them in a range of 16.50 euros to 20.50 euros apiece.
“Shares in a China milk powder retailer are not necessarily a must-have,” a capital markets banker said.
But Windeln.de’s Chief Financial Officer defended the company’s set-up.
“Investors see the large growth potential we have in China. That market is huge,” he said.
The weak debut struck some investors with surprise as Windeln.de had brought the debut forward by two days citing strong demand.
Set up in 2010, Windeln.de wanted to take advantage of buoyant equities markets. Shares of online fashion retailer Zalando have risen 27 percent and those in ecommerce company Rocket Internet have surged 19 percent since their listings in October.
As part of the offering, Windeln.de is raising its capital by up to 127 million euros including an overallotment option, while some of its current shareholders sold stock worth 84 million.
Windeln.de sees potential for growth in Germany, where so far only one in five childcare products is sold via the internet. It also wants to use proceeds from the IPO to enter markets in other countries and make acquisitions.
The retailer, which sells diapers, baby food, children’s clothing and toys, is growing rapidly, but big investments led to a 2014 loss before interest, taxes, depreciation, and amortization (EBITDA) of 11 million euros on sales of 101 million euros.
The group worked with Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs on the IPO, alongside Commerzbank and Berenberg.
(Reporting by Arno Schuetze; editing by Thomas Atkins)