Brazil’s XP Inc shares pop in U.S. market debut


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(Reuters) – Shares of XP Inc (XP.O), Brazil’s largest digital broker, jumped 21.3% in its U.S. market debut on Wednesday, valuing the company at $18.07 billion.

The company’s Class A shares opened at $32.75, up from its initial public offering price of $27 apiece that raised about $1.96 billion.

Founded in 2001 as an independent financial adviser, XP has been challenging Brazil’s traditional banks. With more than 1.5 million clients, XP has 350 billion reais ($83 billion) under management.

It is the second time XP has pursued an IPO. In 2017, it was about to list its shares when it struck a deal with Itau Unibanco Holding SA (ITUB4.SA), Brazil’s largest private-sector lender, which paid 6.3 billion reais in cash and shares to buy a 49.9% stake.

According to XP’s latest regulatory filing, the company has 1.5 million clients and had total revenue of 3.44 billion reais ($819.75 million) in the first nine months of this year, while net income attributable to owners of the parent company in the same period was 692 million reais ($164.90 million).

XP, which has among its shareholders private equity firm General Atlantic LLC and founder Guilherme Benchimol, intends to use the proceeds to invest in marketing, hiring and new financial services, such as digital banking.

Goldman Sachs, JPMorgan Chase & Co, Morgan Stanley, Itau BBA, XP Investments, BofA Securities, Citigroup, Credit Suisse and UBS are underwriting the IPO.

($1 = 4.1964 reais)

Reporting by C Nivedita in Bengaluru; Additional reporting by Abhishek Manikandan; Editing by Shailesh Kuber


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