Intrepid Potash debut not reflective of U.S. IPO market

By Jui Chakravorty Das

NEW YORK (Reuters) - Crop nutrient producer Intrepid Potash Inc's (IPI.N: Quote, Profile, Research) initial public offering this week, while hugely successful, has not planted any seed for hope in an IPO market undermined by investors spooked from the credit crisis.

Despite a weak IPO industry that potential debutantes have been shying away from, Intrepid Potash's share offering priced $6 above the top of the initial forecast range of $24 to $26 on Monday, raising $960 million.

The stock rose 50 percent the morning after it was launched on the New York Stock Exchange and underwriters have exercised their right to buy an additional 4.5 million shares.

But experts said Intrepid Potash's success was unique to the fertilizer company and was not reflective of the overall health of the IPO market, which has suffered from investor panic as the subprime crisis led to a credit squeeze.

Experts say investors are holding back from taking the plunge into IPOs until there is more clarity and stability in the stock market.

"Intrepid was the perfect case of a company going public at the right time at the right place and in the right industry group," Sal Morreale, who tracks IPOs for Cantor Fitzgerald in Los Angeles, said.

Shares of North American fertilizer producers have risen dramatically in the last 12 months -- and companies with sizable potash assets have been among the biggest winners in the sector.

Rising demand for grain across the globe, driven largely by the growing needs of developing economies and the increasing use of biofuels, have led to soaring food grain prices.