The Italian group, which is being spun off from Fiat Chrysler, raised $893m in an offering that drew strong investor demand, according to two people familiar with the matter.
The company sold 17.2m shares at $52 apiece, at the top of its marketed range, valuing it at $9.8bn. Underwriters have the option to purchase an additional 1.7m shares if demand merits, which could swell the offering’s size to $982m.
The IPO is the latest step taken by chairman Sergio Marchionne to reduce the debt burden and fund a €48bn investment programme by Fiat Chrysler, which reaped the proceeds from the IPO.
The Italian-American carmaker, led by Mr Marchionne, sold a 9 per cent stake and saddled Ferrari with debts. Including the new outstanding paper, Ferrari will have an enterprise value of roughly $12bn.
Fiat Chrysler, which may reduce its stake to 80 per cent if the so-called greenshoe is exercised, plans to distribute its remaining shares in Ferrari to stockholders by early 2016.
Piero Ferrari, the son of founder Enzo Ferrari, will retain a 10 per cent stake in the “prancing horse” marque. Exor, the investment vehicle of Italy’s Agnelli family that is largest shareholder in Fiat Chrysler, will hold more than 40 per cent of the voting power under a loyalty plan.
The successful offering vindicates Mr Marchionne’s view that Ferrari was worth “at least” €10bn, slightly less than half of Fiat’s market valuation.
Ferrari, which sells nine models including the 458 Italia and 488 Spider, shipped 7,255 cars last year and generated sales of €2.8bn.
Investors invited to the IPO roadshow were pitched on the carmaker’s heritage and its ability to lift annual production to 10,000 vehicles. The company hopes to buoy earnings by increasing prices on its highest end models as it approaches the 10,000 production target.
“Near term, there is good earnings visibility and the story should work,” said Arun Daniel, portfolio manager at J O Hambro Capital Management. “The question is the next leg of growth beyond the 10,000 units.”
The deal follows a tumultuous few months for new offerings, with several companies, including grocery chain Albertsons, postponing scheduled debuts because of market volatility.
The year 2015 has been the weakest for US-listed IPOs since 2010, with 154 companies raising $32.5bn, according to Dealogic.
UBS and Bank of America Merrill Lynch led the offering, with the Swiss financial group adorning its midtown Manhattan lobby with Ferrari logos in the days ahead of Tuesday’s sale.
Ferrari, the fourth-largest US flotation this year, will begin trading on the New York Stock Exchange under the ticker RACE on Wednesday.
Additional reporting by Nicole Bullock
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