Jumbo Brazil IPO Rallies, Not Enough

VisaNet shares rose 11.8% in their first day of trading to close at BRL16.77. The year’s biggest IPO to date was priced at BRL15.00 on Thursday night, raising the company’s shareholders BRL8.6bn. The first day lift was a positive sign, though some investors hoped stock would trade up 20% or more. “Some people were expecting more than this,” says one portfolio manager who bought the deal. But the performance was nothing to complain about, he adds, noting it was important that the company capped the deal at BRL15.00 instead of breaching the top of the range. That might have resulted in a poor aftermarket and disappointed investors, which the issuer wanted to avoid, according to bankers on the deal. The stock’s performance Monday also suggests, at least initially, that the deal was well priced. Bradesco BBI, Banco do Brasil, Santander and JPMorgan were global coordinators, with UBS Pactual and Goldman Sachs as joint bookrunners.