Shares in Standard Life rose 5 per cent above the issue price on their debut on the London Stock Exchange, valuing the British life assurer at £4.9 billion (€7.08 billion) as it ended 80 years of mutual ownership.
The shares rose 12½p from their issue price of 230p per share to close at 242½p. Some 165 million shares changed hands, making it the second most actively traded stock in the market.
At the closing share price, the average windfall to Standard Life's 2.4 million members will be £1,555. The company's 94,000 Irish shareholders will, on average, receive smaller windfalls, but these will now be worth €672-€1,335.
However, it emerged that just over £300 million of windfalls remained unclaimed on demutualisation. Some 311,000 members will have 10 years to claim their windfall payments, which will be placed in a trust.
Roman Cizdyn, analyst at Oriel Securities, said the performance of the shares was "very much as expected". "It has not flown away and there was a nice big trade," he said.
Bruno Paulson, analyst at Sanford C Bernstein, said: "It looks like the company priced about right to get the mild boost on the first day."
If the shares had risen very strongly, Standard Life might have been open to accusations of floating the life assurer too cheaply and not delivering enough value for members.
Sandy Crombie, chief executive of Standard Life, said: "At the end of the day, we seem to have got a reasonably fair price for those who sold and for those who bought."
In May, Steve Huxham of the Investors' Association on behalf of Fred Woollard, the Australian fund manager and former demutualisation campaigner, warned that, if the first day's trading was at a significant premium to the issue price, members would have "grounds to be aggrieved".
Mr Huxham said yesterday: "It is not too bad at the moment, but I think we have to watch it closely."
Investors and analysts said the trade in shares would have come from some institutional investors who were not allocated as many shares as they would have liked in the initial public offering (IPO), and so were prepared to buy in the market.
It is thought some institutional investors were prepared to pay 235p-240p per share in the IPO, and so they would have still been interested in buying at that level.
However, some other institutional investors who did not get as many shares as they had hoped would have decided to sell out and realise a gain rather than buy more. Selling is not thought to have come from retail investors as they will need confirmation of their holdings before they can sell.
