Oatly joins market with US$10bn valuation


Oatly Group AB (NASDAQ:OTLY) soared on its first day of trading on Wall Street after raising US$1.4bn in its IPO.

The oat milk brand priced 84mln shares at US$17 a pop, which was at the top of its range, implying a market cap of US$10bn.

READ: Swedish oat milk brand Oatly prepares Nasdaq IPO

The stock closed at US$20.20, a 16% premium to the IPO price, and was changing hands for US$20.67 in afterhours trading.

The Swedish company was founded 25 years ago but has enjoyed a boom in trading recently, as consumers worldwide seek more sustainable alternatives to cow milk. Plant-based options are also perceived to be healthier.

“According to Euromonitor, consumers who are who are reducing animal-based products but not following a strict vegan diet, already account for nearly 50% of consumers globally,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.

“More shoppers seem to want an alternative to soya milk, and oat milk is revered for being high in fibre and vitamins, although it has higher levels of calories and carbohydrates compared to plant-based milk alternatives.”

Headquartered in Malmo, Sweden, its oat-based milk and related products, such as yoghurt and ice cream, are sold in more than 20 countries globally.

The group is backed by a roster of celebrities, including Oprah Winfrey and Jay-Z, and institutions such as Belgian investor Verlinvest, state-owned China Resources and Nordics venture capital firm Industrifonden.

However, it’s a crowded market for milk alternatives, with consumer goods giant Nestle launching its pea-based drink Wunda earlier this month.

Oatly could also be joined by Chobani, which makes yoghurt and oat-based milk, on the stock market later this year, with the Wall Street Journal reporting a mooted US$7-10bn IPO.

In Europe, Paris-listed Danone owns the Alpro range, while Unilever PLC (LON:ULVR) has made vegan versions of its Magnum, Ben & Jerry’s and Swedish Glace ice cream among its plant-based options.

“As demand for alternative milk products heats up, Oatly may well find some of the cream is licked off its share price, unless it can keep rolling out fresh product lines to keep its growing customer base loyal,” Streeter continued.

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