Viva Energy, Australia’s largest float since Medibank in 2014, made a disappointing debut on the stockmarket with investors nursing a loss after its first session of trading.

Viva closed at $2.40, 4 per cent below the $2.50 price investors paid for shares. The company earlier hit the boards at $2.43 with trading in the Melbourne-based company kicking off at midday. The oil refiner and fuel retailer announced earlier this week it had raised $2.65 billion through the initial public offering.

“It was a big IPO, which are often hard for the market to digest,” said Andrew Mitchell at Ophir Asset Management, owner of a small stake in Viva. “Ultimately, we think the investor base that it builds over the next week or two will be supportive of the share price.”

Swiss commodities giant Vitol, Viva’s parent company, has pledged to remain a long-term owner of the $4.9bn-valued operator after deciding to retain a 45 per cent stake.

“It’s not a train smash, but you definitely don’t want it down on day one,” said Matt Blumberg at Hayberry Global Fund, which decided against buying shares in the company.

Vitol bought the business for $2.9bn from oil giant Shell in 2014, with Viva’s assets including the Geelong refinery, one of only four in Australia, and a network of more than 20 fuel import terminals through which it supplies a quarter of the nation’s refined fuel needs.

It supplies fuel to 50 airports around Australia and operates 1100 petrol stations throughout the country.

Extracted from The Australian