Shares in Italy’s largest gambling operator Lottomatica are down on the company’s first day of public trading on the Euronext Milan stock exchange.

The business is one of very few in the gambling sector to have pursued an IPO this year, amid global macroeconomic uncertainty and the recent collapse of several banking institutions.

The listing was just the third this year to have taken place on the Euronext Milan.

After setting an initial target price range of between €9 and €11, the business opened trading at the bottom end of that range this morning.

Shares fell even further upon the debut, dropping some 8% to €8.28 in early trading.

According to the Financial Times, that price gave the business a valuation of around €2.26bn, well below analyst expectations from earlier this year, which priced the firm at between €4.5bn and €5bn.

Still, Lottomatica CEO Guglielmo Angelozzi suggested the IPO was a success and that the business was pleased with the result.

“Today opens a new phase for the growth of our group, which will be able to count on an even stronger balance sheet and additional investors to accompany its future development programmes,” he said in a statement published by Euronext Milan.

He also pointed out that more than 85% of the new capital coming into the company was from foreign institutional investors, and that Lottomatica’s listing was the largest IPO to take place in Italy in the past 18 months.

Speaking to the FT, Angelozzi added that despite poor initial trading, the IPO was a net positive for the business.

“This is a marathon, not a sprint,” he said. “We are listing at a discounted valuation, but we are betting on longer term growth. We have no regrets.

“In a different market we could have aimed for more, but we needed to strengthen our balance sheet. We had this window and we took it.”

The company now intends to reduce its debt levels from €1.7bn to €1.3bn using the €425m free float made available via its public listing, while the firm’s owner, Apollo Global, will sell up to €175m of its existing shares, which will also be used to repay a separate loan.

In March this year, Lottomatica reported a 21% year-on-year increase in revenue to €281m for the first two months of 2023.

That growth was driven by a 39% increase in online revenue and a 19% increase in its sports franchise segment, alongside 12% growth in its gaming franchise segment.

EBITDA for the two-month period totalled €104m, a year-on-year increase of 27%.

The business expects to generate between €1.57bn and €1.67bn in revenue during the full-year 2023, with EBITDA between €550m and €570m.