Prada reduces the final price of its IPO

Italian fashion house Prada SpA cut the final price of its IPO by almost a fifth, raising $2.1bn (£1.3bn), as investors balked at a rich valuation and weak global markets.

The maker of luxury bags and Miu Miu dresses set what is Hong Kong’s biggest IPO this year at the lowest end of its revised indicative price range, sources with direct knowledge of the deal said.

Prada’s move came a day after luggage brand Samsonite International slumped almost 8 per cent in its Hong Kong trading debut.

Indeed, only MGM China has posted a first-day gain among the largest IPOs in Asia this year, reflecting investor caution at risking capital in weakening markets. Hong Kong stocks have risen in only one session in the last 12.

“In the short term, it (volatility) certainly will have an impact on any IPOs in Hong Kong,” said Philippe Espinasse, a former investment banker with Nomura and UBS in Hong Kong. “The market is going through a very difficult phase. There’s been an awful lot of volatility in Hong Kong.”

Milan-based Prada priced its initial public offering at HK$39.50 a share, the bottom of a revised indicative price range issued on Thursday. Prada had originally targeted garnering up to $2.6bn.