German defence firm Vincorion rises 17% on Frankfurt debut

By Maria Rugamer

March 20 (Reuters) - Shares in German defence supplier Vincorion V1NC.DE rose as much as 17.2%% on their Frankfurt debut on Friday, buoyed by sustained investor demand following a multiple-times oversubscribed initial public offering (IPO).

The shares pared some early gains to trade up 11.5% at 1147GMT.

The listing consisted exclusively of shares sold by the company's main investor, Star Capital, and did not include a capital increase.

"We don't need money right now to fund our growth. We earn enough for that," Vincorion CEO Kajetan von Mentzingen said.

STEADY APPETITE FOR DEFENCE IPOS

The flotation is one of several European defense IPOs planned for this year, driven by strong investor interest in firms benefiting from increased military spending.

The order book was oversubscribed multiple times within days of its launch, according to underwriters.

"From an analytical perspective, it was the right sector, the right structure, and ultimately priced in a way that allowed for a healthy aftermarket," said Stefan Maassen, head of capital markets & corporates at Deutsche Börse.

Vincorion's expedited IPO process mirrored the approach of Czechoslovak Group CSG.AS, which debuted in Amsterdam earlier this year at a fixed price and within a brief subscription window. Shares in the Czech defence contractor soared after the IPO, pushing its market value to more than 30 billion euros.

Maassen said interest in Vincorion from private investors had been very strong.

"It's both: a general rise in retail participation, and heightened interest specifically in defence," he said.

Von Mentzingen said he did not believe the war in Iran was boosting demand at Vincorion but said it underscored the strength of the company's business model.

"We supply the air defence sector, for example, and that protects cities," he said.

Cornerstone investors in the transaction, including Fidelity, Invesco and T. Rowe Price, had committed to purchasing roughly one-third of the shares.

($1 = 0.8648 euros)