By Emma-Victoria Farr
FRANKFURT (Reuters) -Renk shares jumped as much as 27% on their Frankfurt stock market debut on Wednesday, as rising geopolitical tensions and steadier equities markets boosted the tank gearbox maker just four months after it postponed a previous attempt to float.
The shares opened at 17.50 euros after being issued at 15 euros apiece in Germany's first initial public offering (IPO) this year, and traded as high as 18.99 euros in a fillip for several other companies hoping to go public in Europe.
"Everything above the issue price is a great message to the market," Renk CEO Susanne Wiegand told Reuters.
"The attacks on Israel and the subsequent war in Gaza was a turning point and changed investor sentiment towards defence," she added.
Renk, which supplies gearboxes for Germany's Leopard tanks, used in conflicts such as the Ukraine war, on Tuesday increased the size of its IPO by 50 million euros to sell around 500 million euros of shares in its private placement.
Franco-German company KMW+Nexter Defense Systems (KNDS) and U.S. asset manager Wellington were cornerstone investors, and the proceeds will go to private equity group Triton Partners, which bought Renk from the Volkswagen (ETR:VOWG_p) Group in 2020 for almost 700 million euros.
Renk shares were last trading around 18.47 euros, valuing the company at around 2.15 billion euros.
Last October, Renk and Triton pulled a planned IPO at the last minute, citing a "clouded" market environment. They resumed the issue on Monday but limited it to professional investors to shorten the process.
Defence stocks, including Germany's Hensoldt, have been on the rise since the autumn amid growing geopolitical tensions.
"Renk's business is not only defence-centric, but it also produces mission critical drive train solutions for civil end markets especially in the energy transition space, so there is a sustainability angle which will become increasingly important," said Malte Hopp, head of equity capital markets for Germany and Austria at Citi.
Optimism around IPOs has grown in recent weeks, with central banks signalling interest rates may have peaked and markets less volatile.
Athens International Airport also began trading on Wednesday on Athens Stock Exchange after attracting strong demand.
German perfume retailer Douglas is considering an IPO in the first quarter of the year, Reuters reported in January.
Last week, Kazakhstan's Air Astana set the price range for joint stock exchange listings in London and its home market.
($1 = 0.9292 euros)