Bausch + Lomb was valued at US$6.48 billion in its US market debut on Friday (May 6) as the eye-care company's shares opened nearly 3 per cent above an offer price that was well below the targeted range.
The modest reception from investors comes in a gloomy year for US capital markets and underlines the challenges facing IPO-bound Reddit and Mobileye, the self-driving car unit of Intel.
Fears over the Ukraine conflict and a more hawkish outlook for Federal Reserve policy tightening have in recent months forced several companies to postpone or shelve their plans to go public in the United States.
"Yesterday's sell-off was a uniquely bad time to price an IPO, so in some respect it's impressive they (Bausch + Lomb) got the deal done," said Matt Kennedy, senior strategist at IPO research firm Renaissance Capital.
"In this environment, investors need a much greater margin of safety. I believe most companies are re-evaluating their IPO plans after the dive the market took this week."
Major US stock indexes sank more than 3 per cent on Thursday on worries that even the biggest interest rate hike by the Fed since 2000 would not be enough to tame surging inflation. They also traded lower on Friday.
Bausch + Lomb's stock opened at US$18.50 compared with the IPO price of US$18, which was well below the company's target range of US$21 to US$24.
The IPO raised US$630 million for the selling shareholder, a unit of Bausch + Lomb's parent company Bausch Health Companies. None of the proceeds went to Bausch + Lomb, according to its filing.
The offering was this year's second-largest after the IPO of private-equity giant TPG, which raised nearly US$1 billion in January.
Vaughan, Ontario-based Bausch + Lomb was founded in 1853 as a small optical goods shop in New York and made the lenses used on cameras that took the first satellite picture of the moon.
During World War II, the company made sunglasses for the American military. Bausch + Lomb was also behind the luxury eyewear brand Ray-Ban, but it sold that business to Italy's Luxottica Group in 1999.
The company makes contact lenses, eye drops and ophthalmic pharmaceuticals and has a portfolio of over 400 products that are sold in nearly 100 countries.
The company was first listed on the NYSE in 1958, but was then taken private by Warburg Pincus in 2007.
Morgan Stanley and Goldman Sachs were the lead underwriters for the offering.