Online grocery retailer Ocado is expected to float despite shares being bad valued. Market experts expect the planned IPO to succeed but at the lower end of its valuation. The retailer has plans to declare the pricing of shares on Tuesday and pricing is believed to be set at the lower end of a 200p-275p price range.
City analysts have already denounced the IPO saying the business had been overvalued, which will prompt Ocado to float with a value closer to £800 million rather than the £1.1 billion the directors of the company had been targeting at. The offer to customers is also believed to have increased to between £6 million and £10 million, much below the £50 million the directors had prescribed.
Ocado, which is meeting potential investors, said that it was optimistic about IPO’s success as the US technology funds were showing strong interest. Speaking about the planned IPO, Finance director Andrew Bracey said, “Ocado exists because of its customers and we wanted to offer them an opportunity to take part in the flotation.
Analysts are also questing the timing of floating. Last week, the North Sea oil & gas- exploration group Fairfield Energy ditched its plans for a £325 million float due to volatile markets.