MILAN, April 16 (Reuters) - Shares in Italian payments group Nexi fell 6 percent on their debut on the Milan stock exchange, taking the shine off Europe's biggest initial public offering so far this year.
Nexi shares were trading at 8.44 euros by 1030 GMT, below the 9 euro level at which the offer was priced last week, raising a total of around 2 billion euros.
Once a backwater of banking, the payment processing sector is now regarded as one of the most lucrative and fast-growing businesses in the financial sector, though it faces competition from newcomers trying to disrupt the way merchants are paid.
Nexi's pricing represents an estimated 13 times enterprise value to earnings before interest, tax, depreciation and amortisation (EV/EBITDA) for 2020 and compares with a multiple of around 16 times for rival Worldline and Network International .
"In terms of EV over EBITDA 2019 the multiples are roughly in line with WorldPay , sold to a U.S. rival for $43 billion, a bit daring for the Italian company," a trader said.
Nexi, which runs electronic payments for credit card operator CartaSi, was taken over by private equity funds Bain Capital, Advent International and Clessidra at the end of 2015.
Under the deal, the funds sold part of their shares and now hold a combined 62.6 percent in Nexi.
The fast-growing payments business faces competition from newcomers tapping technologies for alternative payment methods. In Italy, only 14 percent of purchases are cashless compared with more than half in the Netherlands, according to data from research house Ambrosetti.
A second trader said while multiples were high, they reflected expectations of rising growth in the next few years.
A boom in payment systems has kept deals rolling even as merger moves in other sectors have stalled on concerns about trade tensions and a global economic slowdown.
United Arab Emirates-based group Finablr confirmed plans to proceed with an IPO in London and Middle East payments firm Network International floated last week in London.
The deals could help end a drought in the European IPO market, which has seen proceeds slump to $292 million in the first three months of 2019 from $13.9 billion a year ago, Refinitiv data shows.
"The listing is a starting- and not an end-point," Nexi's Chief Executive Paolo Bertoluzzo told reporters on Tuesday.