Institutions picked up 70 per cent of the 15.3 million shares on offer and there was no public pool. Eroad's existing shareholders have retained a 75 per cent stake in the company.
A number of recent IPOs - including those for technology providers Serko, Gentrack and ikeGPS, as well as fruit marketer Scales Corporation - have fallen below their issue prices.
Daniel Metcalfe, senior client adviser at sharebrokers OMF, said Eroad's strong start suggested the offer price - which came in at the bottom of a $3 to $3.80 indicative range - had been set at the "better end of the scale".
"I suppose that was because many of the recent issues haven't gone so well and they wanted to get it away at a decent price," Metcalfe said.
Eroad's solid debut, combined with a similarly successful listing by cinema software developer Vista Group on Monday, could be helpful for the other technology companies that are waiting in the wings and looking to go public later this year.
Vista shares closed at $2.60 last night, up 10.6 per cent from their $2.35 issue price. There will be a pause in IPO activity until after next month's general election but the much anticipated float of software developer Orion Health could take place either later this year or in early 2015, while another IT firm, Wherescape, is also expected to list.
Rickey Ward, JBWere's New Zealand equity manager, said he wasn't convinced that Vista and Eroad's early success would convince all investors that IPOs were a good move.
"I still believe local investors are rather wary [of new listings]," he said.
Meanwhile, as Eroad's shares climbed yesterday, Xero stock was going in the opposite direction and closed down $1.33 at $20.17, 55 per cent below the $44.98 record high it hit in March.
Last night's closing price gave Xero a market capitalisation of $2.6 billion, down from $5.7 billion in March.
The cloud-based accounting software developer has been caught up in a global sell-off of growth-focused equities this year as investors lost their previously ravenous appetite for unprofitable companies with lofty promises of future success.
Xero's latest decline - its shares have dropped roughly 15 per cent this week - has left market watchers scratching their heads.
Ward, however, has one possible theory that relates to the company's $180 million capital raising last October. New shares issued in the capital raising are restricted from being sold until October this year.
Ward said there could be a fear among Xero shareholders that investors involved in the capital raising - including early Facebook investor Peter Thiel - might sell stock when the restriction is lifted, which could push Xero's share price even lower.
Forsyth Barr analyst Blair Galpin had not seen anything to explain why the share price was cooling off.
"It's not a large number of shares trading for that price drop," he said. "Nothing's changed in the Xero story." Xero chief executive Rod Drury said he did not know why the shares fell as the business "is firing".
- additional reporting Hamish Fletcher
