JOHANNESBURG, Nov 28 (Reuters) – Shares in South African discount grocer Boxer rose 16% as they started trading on the Johannesburg Stock Exchange (JSE) on Thursday after institutional inventors led last week’s 8.5 billion rand ($471 million) initial public offering (IPO).

The shares opened at 63.01 rand, compared with the IPO price of 54 rand, as investors bet on the growth of discounters.

“The listing on the JSE will increase our profile and visibility, and provide Boxer with access to a large pool of capital for growth,” CEO Marek Masojada said before blowing a kudu horn to signal the first trade.

“The support from investors was overwhelming, clearly demonstrating the worth of the Boxer business, and unlocking value for both Boxer and Pick n Pay shareholders.”

Parent company Pick n Pay announced on Monday that it had sold 157.4 million shares, representing a 34.4% stake, in Boxer and that its order book was oversubscribed at the top end of the offer price range.

This implies a market capitalisation of 24.7 billion rand for Boxer.

Pick n Pay, the country’s third biggest grocery retailer by market capitalisation, will retain a 65.6% stake in Boxer.

($1 = 18.1938 rand)

(Reporting by Nqobile Dludla; Editing by David Goodman)