High hopes for gas flotation

PGNiG set the range in Warsaw's biggest IPO this year at zł.2.46 to zł.2.98 per share, valuing the sale at up to zł.2.68 billion.

The valuation of the last major Central European gas group still in state hands is well above the zł.1.5 billion PGNiG said earlier it hoped to raise.

Subscriptions started on September 1 and runs until September 15, with the first trade expected on September 23, just two days before parliamentary elections.

But Cyrus Golpayegani of Raiffeisen Capital Management in Vienna said he was unconcerned by the timing. "It's a good company, so I expect the IPO to go smoothly and successfully. It's not an issue that the debut is coming before the elections, because looking at what's happening with the sector, it's appropriate to move fast," he said.

The price range values all of PGNiG, whose peers around the world have seen strong share price growth thanks to record energy prices, between zł.14.5 billion and zł.17.6 billion.

"There's a lot of interest. The phones have been ringing off the hook, and banks are opening credit lines for individual investors, so in that tranche we could see more than 20 times over-subscription," said Bank Millennium analyst Tomasz Nowak.

But he added that the relatively high price may mean thin trade immediately after the debut, as institutional investors whose orders were reduced wait for prices to soften before topping up their holdings.

PGNiG is the dominant player on Poland's still underdeveloped gas market, which the IPO advisers expect to grow by five to six percent a year as gas usage rises to levels common in other European Union countries. (Reuters)