Yirendai Ltd, the consumer finance arm of Chinese peer-to-peer (P2P) lender CreditEase, made a tepid U.S. market debut on Friday, with its shares trading as much as 16.5 percent below the offer price.
The company's initial public offering raised $75 million after its American Depository Shares were priced at $10 each, the midpoint of the expected range of $9-$11.
Yirendai, founded in 2012, is growing rapidly by filling a demand for credit from individuals who find it difficult to obtain loans from traditional Chinese lenders.
Yirendai Chief Financial Officer Dennis Cong told Reuters that their market debut was "a little surprising, given how strong the demand he saw from the investors".
"The market volatility or the end of the year has some play in it", he said.
The shares were trading at the IPO price after about 20 minutes, valuing the company at about $585 million. The stock traded between $9.65 and $10.39.
Beijing-based Yirendai is the first Chinese online P2P platform to be listed overseas, joining numerous Chinese financial institutions that listed on the U.S. exchanges this year.
Chinese financial institutions have raised about $59.6 billion so far in IPOs and follow-ons, the second largest raising after 2010, according to Thomson Reuters data.
Yirendai offers prime borrowers in China access to unsecured credit by connecting them to investors through its online marketplace, similar to the peer-to-peer model of U.S. lender LendingClub Corp, which went public late last year.
The company, which has about 6.7 million registered users, says it facilitated $984 million of loans in the nine months ended Sept. 30, up from $41 million in all of 2013.
CreditEase's shareholders include Morgan Stanley's Asia private equity arm, Kleiner Perkins Caufield & Byers, and IDG Capital Partners.
Yirendai founder and Executive Chairman Ning Tang, who owns about 38 percent stake in the company after the offering, has committed to buy $30 million shares at the IPO price. Along with the IPO, the company sold $10 million shares to Internet company Baidu Inc through a concurrent private placement.
Earlier this week, police in China said they had frozen and seized assets from Ezubao, the country's largest P2P platform by loans, as part of an investigation.
Morgan Stanley, Credit Suisse, Needham & Co and China Renaissance are among the underwriters of the IPO.
(Reporting by Shu Zhang in Beijing and Sruthi Shankar in Bengaluru; Editing by Ted Kerr and Shounak Dasgupta)