Newly listed iSelect (ISU) has been pummelled on its first day of trade as investors react negatively to the Australian Stock Exchange’s second major float in two weeks.
The insurance comparison group dived by 15.7% to close at $1.56 – its lowest price over the course of the day – from its initial offer price of $1.85.
The stock's previous low was $1.58 at 1212 AEST and its high was $1.68 at 1445 AEST.
The decline coincides with the wider market’s fall of 1.5% to its lowest point in the year to date.
This puts the market capitalisation of the company at around $404 million, with approximately $75 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, closed today at $6.34 – 14 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.