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Porsche AG's Initial Public Offering

Porsche AG’s initial public offering (IPO) will take place on the 29th of September 2022, as a Frankfurt listing. Volkswagen (ETR:VOW3) will float 12.5% of Porsche, raising around €9 billion for the company, with the sale set to become one of Germany’s largest to date.

Volkswagen are pricing the shares between €76.50 and €82.50, indicating the company would be valued between €70 billion to €75 billion.

Like many other companies within the automotive industry, Porsche AG is operating in a highly uncertain environment i.e., inflationary pressures, supply issues, alternative drivetrains and autonomous driving. Some of these issues were covered within their long-term strategy release, for instance, the transition towards electric vehicles (EV’s). Roughly one quarter of Porsche's sales last year came from EV’s, yet with their heritage being a unique selling point, Porsche will need to tactfully manage this transition going forward.

However, Porsche is in good stead to manage both economic turbulence and industry reform. As the business delivers coveted products, consumers are not typically concerned with the rising cost of living. In fact, for these luxury items, demand increases even when their price rises. In addition, and contrary to their ownership structure, their product line is extremely simple with six core models. It is this focused product line and luxury image that allows Porsche to produce consistent profits, generating roughly €3.9 billion in operating profits in 2019, and €4.2 billion in 2020.

Porsche plans to issue 911 million shares in its IPO in homage to its most famous car.


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