Mr Richard Branson's Virgin Mobile clocked up a small premium in early trade today in a cut-price market debut that valued the British mobile phone group at some £511 million pounds.
As Mr Branson returned to the London stockmarket after a 16 year absence, Britain's fifth-ranked mobile phone company edged to a high of 207p in its first hour of trade, after being priced at the bottom of a discounted 200-220 pence per share range.
It stabilised at 204.5 pence at 8 a.m., valuing the group at £511.25 million pounds, an £11.25 million pound equity gain.
The company, part of Branson's Virgin Group airlines-to-music empire, will raise £125 million pounds from the global offering of a 25 per cent stake. But it said it might sell up to 27.5 per cent if there was enough investor demand.
"We are happy that Virgin Mobile is floating on the London Stock Exchange, particularly given the difficult markets, which have seen several other IPOs (initial public offerings) abandoned this year," said Mr Branson, Virgin Mobile's honorary president.
Virgin Mobile, a low-cost, no-frills mobile phone service provider, says it is set for high growth because it does not have to maintain a costly network and has won 3.3 million active customers on the back of its strong brand and sassy advertising.
But the company and its bookrunners - J.P. Morgan and Morgan Stanley - were forced on Monday to slash a former price range by 20 per cent after investors questioned a valuation that priced Virgin Mobile at a premium to cell phone network owners Vodafone Group and mmO2.