THG Holdings plc (LON:THG) raced to a premium as it commenced trading on Wednesday morning after completing the bookbuilding process related to the initial public offering.
The health and beauty group, which sells cosmetics online but also owns hotels and a gym, was valued at £5.4bn, issuing the first shares at 500p a pop.
The IPO comprises 376mln shares worth £1.88bn or 35% of the firm’s entire issued capital.
It is the largest flotation in the UK since 2015, despite coming in the middle of the pandemic, but it is not qualifying for inclusion in FTSE indices due to the limited free float and founder share held by Matthew Moulding.
“Much of the excitement around the stock surrounds its Ingenuity e-commerce fulfilment platform. In the same way Ocado’s online groceries solution is sold to third party supermarkets – The Hut is signing up the likes of Nestle and Proctor & Gamble to Ingenuity and this is seen as the big growth opportunity for the business,” said Russ Mould, investment director at AJ Bell.
“The company is investing heavily to achieve this growth and like Ocado remains loss-making on most metrics for the time being.”
“Eyebrows have been raised over some governance issues attached to the stock including the fact management are incentivised on share price performance.”