The IPO – London’s biggest in a decade – saw more than £2bn wiped off Deliveroo’s value within minutes.
Deliveroo shares have slumped as much as 30% as the takeaway delivery company made its highly-anticipated stock market debut.
Some of the City’s biggest institutional investors had shunned the initial public offering (IPO) over concerns about its working practices and the dual-class share structure which gives founder Will Shu greater control.
The loss-making company said this week that it had received “significant demand” from investors across the globe – more than enough to cover the offer of shares worth £1.5bn several times over.
But that was not enough to prevent a flop when trading began, with shares going as low as £2.73, although they later climbed back above the £3 mark.
Deliveroo’s float is London’s biggest IPO since commodity giant Glencore went public in 2011 – and the biggest-ever tech float in the city.
Its dismal reception could be seen as blow to Chancellor Rishi Sunak’s ambition to attract more technology companies to list in the UK.
Deliveroo, which has around 45,000 restaurants on its platform in the UK and more than 100,000 worldwide, has benefited over the past year from an increased appetite for takeaways with dining out banned or restricted.
Orders over January and February were 121% higher than the same period a year ago, while for 2020 the total of £4.1bn was 64% higher than a year earlier.