Shares of Alon USA Partners LP (ALDW.N) rose as much as 19 percent in their market debut on Tuesday, after the refiner priced its offering well below its expected price range.
The company priced its initial public offering of 10 million shares at $16 each. The company now has 62.5 million shares outstanding, fetching it a market capitalization of close to $1 billion.
Alon USA Partners had expected its IPO to be priced between $19 and $21 per share.
"The market is not used to processing and evaluating refinery IPOs and so they wanted to price it low because they did not want to have a broken IPO," Francis Gaskins from IPO Desktop said.
Alon USA Partners, a unit of Alon USA Energy Inc (ALJ.N), was formed to own and operate its parent's refining and petroleum marketing business in South Central and Southwestern regions of the United States.
The company owns and operates a crude oil refinery in Big Spring, Texas, with total throughput capacity of about 70,000 barrels per day.
The Dallas-based company had filed with the U.S. Securities and Exchange Commission in August to raise up to $230 million in an IPO. [ID:nL4E8JV7GT]
Seadrill Ltd (SDRL.N), the world's biggest deep-sea drilling rig owner, Delek Logistics Partners LP (DKL.N), Southcross Energy Partners (SXE.N), Lehigh Gas Partners LP LGP.N, and Diamondback Energy Inc (FANG.O) have gone public last month and have gained 10 percent on average since their IPOs.
Goldman Sachs & Co, Credit Suisse and Citigroup are acting as lead underwriters to the offering.
The company, which reported net income of $268.7 million on revenue of $2.65 billion for the nine months ended September 30, plans to use the proceeds from the offering to repay debt and for capital expenditure.
Alon USA Partners' shares were trading at $18.94 on the New York Stock Exchange on Tuesday afternoon.
(Reporting by Avik Das in Bangalore; Editing by Supriya Kurane)