German perfume retailer Douglas AG slumped as much as 11 percent as it began trading in Frankfurt after raising €850 million ($929 million) in the country’s largest listing this year.

The CVC-backed company’s shares hit a low of €23.20 a share, compared with the IPO price of €26. The offering was pitched at the bottom of an advertised range to entice investors back into a market that has been subdued for much of the past 18 months.

Douglas’s listing comes at the same time as EQT AB’s skincare business Galderma Group AG, which is set to start trading on Friday. While such deals have been fuelling a resurgence in European listing activity, price drops like this also undermine investors’ confidence and make them more wary about buying into future new issues.

Guillermo Hernandez Sampere, head of trading at asset manager MPPM, said there aren’t many reasons to invest in a company that’s returning to stock markets with a pile of debt. There’s “not much confidence left in them,” he said, adding “look at the IPOs in Germany for the last five years, it’s not our proudest moments.”

Stocks that have listed in Germany over the past five years and that are now trading below their offer price include Thyssenkrupp Nucera, Cherry SE, Bike24 Holding AG, Auto1 Group SE, Mister Spex SE, About You Holding SE and TeamViewer SE. Frankfurt has a mixed track record, however, with some launches such as Renk Group AG and Hensoldt AG showing market-beating returns.

Douglas’s share sale raised about €890 million in all, with Kirk Beauty International, a holding company owned by CVC as well as the beauty chain’s founding Kreke family, raising just about €39 million in the offering. The newly-listed company will be valued at €2.8 billion, based on the offering price. CVC will hold a 54.4 percent stake, while the Kreke family will own 10.2 percent.

Douglas, which was founded more than 200 years ago, sells a host of premium beauty products through about 1,850 stores. The European shopping centre-staple also has an online presence.

By Swetha Gopinath

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