Newly listed iSelect (ISU) has been pummelled in early trade as investors react negatively to the Australian Stock Exchange’s second major float in two weeks.
The insurance comparison group has dived 10.3% to $1.66 as of 1334 AEST from its initial offer price of $1.85.
The decline coincides with the wider market’s fall of just less than 1.5% in morning trade.
This puts the market capitalisation of the company at around $429 million, with more than $53 million already wiped off its value.
iSelect’s listing, which raised $215 million for over 116 million shares, is the most important float since Virtus Health successfully listed two weeks ago.
In contrast Virtus, Australia’s largest In Vitro Fertilisation provider and the only one on the market, trades at $6.26 at 1335 AEST – six cents up from its first-day close and 10.2% higher than its initial offer price of $5.68.
Melbourne-based iSelect acquires around 80% of its revenue from its online service that compares rival health insurance offerings. However, its own life and car insurance plans are representing a growing proportion of sales.
Major shareholders include co-founder Damien Waller with a 9% stake and US-based private equity fund Spectrum with 7.6%.
Ninemsn sold its 35% stake in iSelect for $113.5 million as part of the float.