Another lift for London IPOs after Esure's float takes off

London's IPO market passed its latest test with flying colours yesterday as Esure shares rose by more than 5 per cent on their debut.

Banks advising the motor insurer priced its shares at 290p, valuing the company at £1.2bn. More than 116 million shares changed hands on the first day of trading, helping them climb higher than 315p, before settling at 307p.

Esure's shareholders, including founder Peter Wood and Tosca Penta Investments, will pocket a combined £554m from the stock market flotation. Mr Wood, who will receive about £198m, will remain the company's largest shareholder with a stake of 30.9 per cent.

"Today's pricing is a ringing endorsement of Esure's strengths and future prospects and we welcome all of our new shareholders, both institutional and retail, as co-investors in the next exciting phase of our development," Mr Wood said.