By Gabriel Stargardter
MEXICO CITY, Oct 16 (Reuters) - Mexico dairy producer Lala's stock soared in its market debut on Wednesday, jumping more than 10 percent before easing in the latest in a record number of public offerings on the local market.
The company had priced its initial public offering at the top end of the range at 27.50 pesos per share, and the shares rose as high as 30.50 pesos in the first seconds of trading. The share sale netted the company more than $1 billion.
The shares then trimmed gains to 29.04 pesos, 5.6 percent higher than the IPO price.
Bank BBVA Bancomer said in a statement that the offering, in which it was involved, raised 14.1 billion pesos ($1.1 billion).
"Despite a challenging market environment, (the IPO) was 9.8 times oversubscribed considering the over-allotment," the bank said, adding that 32 institutional investors and 11,000 private investors participated in the offering.
Lala, among the biggest dairies in Latin America, raised the capital to expand its distribution and prepay some bank debt, according to regulatory filings.
"It's a very good company and people like the idea of tapping the market for Mexican consumer goods," said Gerardo Roman, head of stock trading for Actinver brokerage in Mexico City. "The IPO was very well managed."
He added that he expected demand to drop off if the stock price increased as much as 25 percent, but it should continue to be in hot demand below that level.
Mexican companies are launching IPOs and secondary share offerings at unprecedented rates even as the wider economy slows, breathing new life into what has historically been a limited stock market.
Lala has a well-recognized brand name in Mexico with just more than half of the country's market for milk and cream and about one-third of the market for pre-packaged cheese, according to AC Nielsen figures cited by the company.
The dairy company said it had revenue of 40.345 billion pesos (about $3.1 billion) and core profit, or earnings before interest, taxes, depreciation and amortization, of 4.764 billion pesos in 2012.