Bomi flops on debut

Retail chain Bomi saw the value of its shares fall by almost 18 percent during its IPO in late August. The stocks fell from the issue price of zł.23 to zł.18.90 at the opening of trade. At the end of the first day, the firm's share price had recovered to zł.20.60, still well below the issue price. The result made Bomi one of only five companies out of the first 44 debuts this year to lose value on its debut day.

The company's president, Stanisław Okonek, blamed the weak debut on the situation on the US bourses. He promised that the firm would shrug off the disappointment. "The firm has good foundations to develop quickly," Okonek said.

Analysts agree that recent events on the capital markets weren't helpful for Bomi's debut. "From the time of the subscription to the first listing, the situation on the stock exchange worsened, causing many investors to withdraw from the investment," BM Bank BPH analyst Sobiesław Kozłowski said. By the end of last week, Bomi's shares had reraced their losses.

The company raised zł.44 million from its debut. It wants to devote these funds to carry out its strategic investment plan for 2007-2009. Bomi needs zł.121 million to fulfil its plans for opening new outlets, modernizing existing ones, and introducing modern IT systems. The firm currently has 21 stores in nine cities across Poland.

"In the next three years we want to open 10 new stores per year ... By the end of 2009 we want to have 48 stores," Okonek said.

Kozłowski claims that a lot will depend on market conditions and on acquisition prices if Bomi wants to be successful. He added that the latter will be crucial for the company to get synergy effects from its planned takeovers.