SmartStream has cut the price range of its impending flotation to around £200m as a result of the current market volatility, but remains confident that investors will snap up shares at the discounted price.
Sources familiar with the situation said that the banking software developer has lowered the price range to tempt investors to participate in the flotation.
The company had initially expected the IPO to value the software company at up to £300m, making it one of the largest software listings since the tech boom, but has since reduced its price range to reflect a valuation of between £175m and £200m.
The company will continue to pursue the listing despite other IPOs – most notably the $9bn (£4.5bn) flotation of the Russian aluminium giant Rusal – being shelved due to the market volatility around the credit crunch.
The source said that investor feedback has been "very strong" over the first week of the company's IPO roadshow. Pricing is expected on 28 September and the company has already received firm orders to buy stock.
SmartStream is actually one of the few beneficiaries of the market malaise as its software automates the back-office functions of large investment banks, matching trades and correcting errors during financial transactions.
It argues that the recent surge in trading on the back of the credit crisis had highlighted the need for better systems to process transactions with many large banks struggling to cope with the increased volumes.
SmartStream, whose chief executive is Ken Archer, has won two major contracts over the past month according to sources. IDC estimates the transaction process management market is worth around $540m and will grow at around 10 per cent a year over the next five years.
The company has a market share of around 38 per cent in the trade reconciliation market and works with 75 of the 100 largest banks. The company, whose chairman is software veteran Ron Mackintosh who has previously worked at well-regarded developers Royalblue and Northgate Information Solutions, hopes to raise up to £100m via the listing to pay down debt as well as raising its profile. The company is majority owned by TA Associates, the Canadian private equity company.