Right of way on the stock exchange: How Porsche is one of the biggest IPOs of all time

Enlarge image

Attention by all means: Porsche AG has

divided its share capital into 911 million shares based on its most famous

Photo: KAI PFAFFENBACH/ REUTERS

It could be the largest IPO in Germany for more than 25 years: Next Thursday, September 29, the sports car manufacturer Porsche will appear on the stock exchange for the first time.

In allusion to the classic Porsche 911, the share capital of Porsche AG was divided into 911 million shares.

A total of 12.5 percent of these securities are currently being offered on the open market as non-voting preference shares in a price range of EUR 76.50 to EUR 82.50.

This results in an expected market valuation of up to 75 billion euros.

The sports car manufacturer would thus be worth significantly more than its two German competitors: the Stuttgart car manufacturer Mercedes-Benz currently has a market capitalization of 58 billion euros.

Rival BMW is valued at around 47 billion euros, although the two offer significantly more in terms of sales and sales.

Mercedes, for example, generated sales of 71.3 billion euros in the first half of the year, while Porsche only managed 17.9 billion euros.

However, Porsche is significantly more profitable: while BMW and Mercedes-Benz achieved an EBIT margin of 12 percent last year, Porsche achieved 16 percent;

in the first six months of this year, Porsche even achieved a margin of 19.4 percent.

This comparatively high level of profitability should also justify a higher stock market value.

Biggest IPO since Telekom IPO

Porsche boss

(54) expects the IPO to have an issue volume of 8.7 to 9.4 billion euros.

In the best-case scenario, that would only be 600 million euros less than the currently largest IPO (initial public offering) in Germany, when Deutsche Telekom entered the capital market in 1996.

Back then, Telekom, accompanied by a gigantic advertising campaign, reached more private investors than any company before.

At that time, the Bonn-based group generated almost ten billion euros.

But in 2000 the dot-com bubble burst, the T-Share also slipped and brought many small investors into financial difficulties.

Today Telekom is in demand again, the paper recorded a price gain of 8 percent this year.

CEO

(60) recently increased the forecast for the second time in a year thanks to the strong performance of his US subsidiary T-Mobile.

Telekom ranks eleventh among the largest IPOs in the world

In the ranking of the world's largest IPOs, Telekom has made it to eleventh place with its former mega IPO.

The Saudi Arabian oil company Saudi Aramco has been unbeaten here since 2019, earning around 25.6 billion US dollars on its debut on the stock exchange.

The state-owned company was valued at $1.7 trillion at the time.

Saudi Aramco is currently benefiting from the high oil prices against the background of the Ukraine war.

In the first quarter of 2022, the company had made a profit of almost 40 billion US dollars, 82 percent more than in the same period last year.

In the meantime, the group with a market value of currently around 2.1 trillion dollars has even replaced the iPhone manufacturer Apple as the most valuable company in the world.

With its targeted issue proceeds, Porsche would end up 19th in the world rankings – and thus among the top 20 largest IPOs of all time.

In Germany, the IPO is already attracting keen interest: Shortly after the subscription period began last Tuesday, the share was oversubscribed several times, according to the banks involved.

In most IPOs, it often takes days for subscription orders to exceed supply.

Porsche AG could therefore perhaps join its major shareholders Volkswagen and Porsche SE in the Dax as early as December.