Volvo Shrinks Upcoming IPO, Valuation Now At $18 Billion

Volvo has shrunk the size of its initial public offering just days before it starts trading on Nasdaq Stockholm on October 29, a day later than initially announced.

The Swedish car manufacturer had previously said its IPO would be priced between 53 crowns ($6.20) and 68 crowns ($7.90) per share and has now confirmed they will indeed be priced at 53 crowns ($6.20) apiece, valuing the company at a touch over $18 billion.

Volvo says it now plans to raise around 20 billion Swedish crowns by going public ($2.3 billion). It had expected its value to hit $23 billion at the top of its initial IPO pricing range.

Read More: Volvo Confirms Initial Public Offering On Nasdaq Stockholm

“We have been listening to the market, humbly,” Volvo chief executive Hakan Samuelsson told news agency TT, Reuters reports.

Volvo’s IPO will result in a free float of 16 per cent to 17.9 per cent.

“I would rather have seen a bigger share of the company listed to get a larger owner base and a liquid share… now we’ll have a smaller share listed, which is somewhat unfortunate,” Handelsbanken analyst Hampus Engellau said in a statement.

Volvo’s IPO in Sweden will be the country’s largest since local telecommunications company Telia Co AB went public in 2000 and raised $8.9 billion. The carmaker wants to use the funds to boost sales to 1.2 million vehicles annually by 2025, roughly double what it sold in 2020.

“We have supported the transformation and growth of this iconic Swedish brand during a period of unprecedented change in our industry,” chairperson of Volvo Cars’ board of directors Eric Li recently said in a statement. “Over the past decade, Volvo Cars has turned itself into one of the world’s fastest-growing carmakers. We will continue to support Volvo Cars as a majority shareholder in this ongoing global success story.”

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