FRANKFURT Shares in Innogy (IGY.DE), comprising the healthy assets of struggling power group RWE (RWEG.DE), hovered around the issue price in their stock market debut on Friday in Germany's largest listing in 16 years.
The stock started trading at 37.30 euros, above an issue price of 36 euros, but dipped as low as 35.95 euros in early trade. RWE, which still holds three-quarters of Innogy, was down 3.8 percent.
Innogy bundles the networks, renewables and retail business of RWE, Germany's second-largest utility. Power generation and energy trading stay with RWE.
The IPO is a consequence of years of falling profits at RWE's conventional power generation unit, its core business, which has come under intense pressure from renewables and a steep decline in wholesale prices.
This has led investors to dump German utility stocks and slap major discounts on them. Investors are also concerned at the potential costs of storing radioactive waste after the country's last nuclear power plants go offline in 2022.
Valued at roughly 20 billion euros ($22.2 billion), or more than twice RWE's current market capitalization, Innogy's IPO reflects this relief, giving investors direct exposure to power and gas networks, regulated assets with steady returns.
(Reporting by Christoph Steitz; Writing by Maria Sheahan; Editing by Harro ten Wolde and Adrian Croft)