By Ateev Bhandari and Prakhar Srivastava
(Reuters) -Karman Holdings was valued at nearly $4 billion after its shares surged 36% in their NYSE debut on Thursday, signaling investor appetite for defense and space firms as expectations grow for market expansion under the new Trump administration.
The IPO market is on the road to recovery following a cold stretch spanning more than two years, as investors expect rising corporate profits on potential deregulation and tax-cuts under the presidency of Donald Trump.
The defense and space systems maker’s stock opened at $30 apiece, compared with the initial public offering price of $22. It was last up 31%.
Karman’s robust debut presents a change of pace after lukewarm first-day performances from some high-profile listings such as Venture Global and Smithfield Foods in the last few weeks.
The Huntington Beach, California-based company — backed by Trive Capital — and some of its existing shareholders raised $506 million in an upsized IPO. They sold 23 million shares above the marketed range of $18 to $20 each.
Policymakers predict Trump would push ahead with a race to the moon and possibly Mars, bolstered by his friendship with SpaceX founder Elon Musk.
Last month, Trump signed an order that mandated a process to develop an “American Iron Dome”, a next-generation U.S. missile defense shield against ballistic, hypersonic, cruise missile and other forms of aerial attack.
“As a specialist in areas like hypersonic missile defense, Karman could benefit from increased defense spending and a focus on ‘America First’ manufacturing,” said Josef Schuster, CEO of IPO-focused investment indexes, IPOX.
“Trump revived Space Force initiative and plans to increase NATO spending, but his reputation for driving hard bargains could squeeze profit margins,” he said.
Founded in 1977, Karman specializes in payload and protection systems, aerodynamic interstage systems and propulsion and launch systems.
(Reporting by Ateev Bhandari and Prakhar Srivastava in Bengaluru; Editing by Shilpi Majumdar)
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