Beauty group Puig‘s shares closed flat in their market debut on Friday, a lukewarm reception to Spain’s largest initial public offering in almost a decade.

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Shares rose at the start of trading but soon pared gains before falling back to their issue price of 24.5 euros.
Earlier this week, the owner of Rabanne and Carolina Herrera priced its oversubscribed IPO at the top of its targeted valuation range, giving it a market capitalisation of almost 14 billion euros.

A source familiar with the transaction said a drop in Estee Lauder‘s hare price and the fact that the IPO was priced at the top end had weighed on Puig’s initial trading performance.

But an expectation that Puig may join stock indices including Spain’s IBEX 35 could drive further demand for its shares, said Xavier Brun, a portfolio manager at Trea Asset Management who participated in the IPO.

“There is a lot of interest in investing in it,” he said, adding that retail investors excluded from the IPO may now buy shares.

The IPO of family-owned Puig is the latest in a string of European listings this year, on the back of higher stock prices and improving market sentiment.

The performance of new stocks has been mixed, however. Swiss skincare group Galderma and private equity firm CVC Capital Partners soared on their market debuts, while German perfume retailer Douglas has traded below its issue price.

Puig and its eponymous controlling family stand to raise up to 3 billion euros through the IPO, which offered class B shares to external investors, conferring fewer voting rights.

“Our intention is for the family to remain behind this project because a family business looks for the short-term results but also looks to do things right looking in the long-run,” CEO and chairman Marc Puig told reporters at the opening ceremony in Barcelona.

Barcelona-based Puig, which has made a string of acquisitions in the last decade, saw net revenues grow 10.1% in the first quarter of 2024 from the year before, exceeding the overall growth of the wider premium beauty market.

While EMEA markets accounted for 54% of net sales in 2023, the company has said it plans to expand in Asia.