Debenhams made a mainly flat return to the stock market after an absence of more than two years yesterday.
The stock began trading at 195p - giving Debenhams a market value of £1.675 billion - and closed at 20014p. When Debenhams - which has a store in Birmingham's Bull-ring - announced plans to float last month, it said the shares would be priced in a range between 195p and 250p.
Owners CVC Capital Partners, Texas Pacific and Merrill Lynch Global Private Equity, along with management, have sold 487 million shares, retaining 43 per cent of the stock.
At the lower price the offer raised £950 million, including £700 million to pay down debt and £250 million to be shared among the owners. The offer was more than twice subscribed by institutional shareholders, Debenhams said.
"We are pleased with the quality of Debenhams' shareholder register on the company's return to the stock market," said chief executive Rob Templeman, who added that he looked forward to Debenhams' future with confidence.
However, analysts expressed concern in the run-up to the flotation that the returns generated by the private equity owners would leave little value in the business, particularly at a time of slowing sales growth.
David Buik of Cantor Index said: "An issue price of 195p suggests that there has been a lack of enthusiasm to subscribe for this stock.
"With the retail market remaining tough in the high street, many private investors believe there may be more fertile sectors to invest in for the next few weeks, despite some positive credentials offered by Debenhams and its advisers."
The department store chain was bought in 2003 for £1.7 billion plus £100 million debt. The owners have since received capital repayments of £1.3 billion and the company now has £1.2 billion of debt because freehold property assets have been sold and leased back.
However, since going private Debenhams has increased its market share to 18.6 per cent from 15.2 per cent and has spent about £260 million modernising stores and opening new ones.
It has also launched a small-store format called Desire, cut the number of suppliers to 500 from 700 and increased the operating margin to 15.8 per cent from 12 per cent.
Debenhams management, led by Mr Templeman, who also ran Homebase and Halfords as private companies, have ambitious plans to double the number of large stores and roll out up to 100 Desire shops. They will retain 70 per cent of their shareholdings in the company for at least 12 months and plan to work on tightening up the supply chain to boost profits.