Lottomatica shares were sold at a generous discount to its peers at the bottom of a €9–€11 range, yet the stock opened on Euronext Milan at €8.50, nearly 5.6% below issue, and dropped as low as €7.958 shortly after 8:30am in London, a fall of 11.6%.

Prices recovered slightly but the shares were still down 8.7% at €8.22 after 12:45pm with VWAP at €8.2736.

Volume was 7.87m shares across more than 15,500 trades representing 11.8% of the 66.6m shares sold in the IPO.

“We’ve done everything we can to get the best result, tightly allocating, scaling back, reducing the tail and giving long-only money less than what they hoped for in order to incentivise them to buy in the aftermarket,” said a banker at one of the global coordinators. “We are seeing buying but not in the amounts that they should be. I think it’s investor nervousness but it’s hard to give an exact reason why IPOs are not trading well.”

The banker said that Lottomatica has failed to prise open the IPO market despite being a quality asset. Other than small, largely local deals for Italian Design Brands and Romania’s Agricover, there are few deals certain to launch this year beyond Hidroelectrica, which has a government-imposed deadline of the end of June.

The banker said restoring confidence will require solid if not spectacular aftermarkets over several deals, which appears highly ambitious this year.

A banker away from the deal said it was unhelpful to see this year’s third European IPO in a row trade badly following Ionos and EuroGroup which both fell on debut.