Shares in Canterbury-based milk processor Synlait Milk ended their first day of trading on the NZX at a 54c, or 24.5 per cent, premium to their $2.20 issue price, reflecting strong investor demand and a limited supply of stock.
Synlait Milk shares debuted at $2.62 and went on to trade in a $2.61 to $2.90 range before closing at $2.74.
The initial public offer attracted strong support from institutions in New Zealand, Australia, Singapore and Hong Kong and New Zealand retail investors.
China's Bright Dairy will remain Synlait Milk's cornerstone shareholder, with a 39.1 per cent holding, down from 51 per cent before the offer. Japan's Mitsui has an 8.4 per cent stake.
The company's chief executive, John Penno, said the successful initial public offer and sharemarket float was "an endorsement of where we have got to and where we are going".
Holland's Royal FrieslandCampina surprised the market by picking up a 7.5 per cent stake during the book-building phase early this month, which may have added to the stock's attraction.
"Having Royal FrieslandCampina on the register is impressive support, so some people seem to be taking heart from that," said Shane Solly, portfolio manager at Mint Asset Management. FrieslandCampina, with Bright Dairy, would represent a powerful investor base, he said.
The offer was priced at the lower end of an indicative $2.05 to $2.65 price range but Penno told a news conference the company was more focused on getting a good share register together, rather than pricing.
"Price is important but ultimately we were not prepared to sacrifice the share register to get the ultimate in price."
Penno said the strong market price was a reflection of FrieslandCampina coming on board and unsatisfied retail demand.
Rakaia-based Synlait Milk successfully raised $75 million in new capital from the IPO, which it said it would use to repay debt and help fund construction of a new lactoferrin extraction and purification facility, an on-site blending and consumer packaging plant, a new dry store, a quality testing laboratory, a butter plant and a new spray dryer.
FrieslandCampina is one of the largest dairy co-ops in the world and is an existing customer of Synlait Milk.
NZX chief executive Tim Bennett said the IPO showed there was "strong underlying demand" from overseas for investments in the domestic agriculture sector.
"We have had a very strong run of IPOs this year and the pipeline looks good," Bennett said.
The IPO process added 2296 new shareholders to Synlait Milk's share register. The offer, which also allowed existing Synlait Milk shareholders to sell into it, resulted in gross proceeds of $114 million.