The stock slumped 8 per cent, making it the latest big-ticket float to underwhelm investors in recent days.
Despite a robust day on the broader market, RiverCity hit the boards at 46.5¢ – a drop from the 50¢ issue price. The stock closed at 46¢ after dipping as low as 44.5¢.
More than six million of the partly-paid stapled securities or 1 per cent of the stock changed hands, which acting chief executive officer Peter Hicks said indicated investors were in for the long-term.
(Securities are worth $1, with the remaining 50¢ due in 12 months).
The debut made for a subdued atmosphere at the Brisbane stock exchange where management and the board had turned out for the midday opening.
Directors were soon putting on a brave face, with some sipping champagne while others stuck with juice, coffee or tea and sandwiches.
"I would have preferred to see it over 50¢, but we'll wait and see," chairman Bob Morris said. "We're confident in the fundamentals of the investment."
Asked why he thought it dipped, he said: "The general infrastructure market, interest rate pressures, all those things no doubt have some bearing."
The float had raised $690 million, with RiverCity speaking of strong demand.
However, some analysts and fund managers had been concerned about RiverCity's payment methods, traffic forecasts or risks involved in the one-asset project.
The Intelligent Investor managing director Steve Johnson said the float did not seem overly rushed.
RiverCity yesterday again declined to specify how much it could have raised.
Mr Hicks said the upcoming financial close and construction start would make RiverCity more meaningful to the market.
But Opis Capital portfolio manager Rob Frost said: "There's not a lot of buying out there.
"The market sentiment out there for infrastructure stocks is pretty poor. Infrastructure stocks are interest rate-sensitive."
This is partly because higher interest rates can negatively affect valuations for infrastructure.
Burrell Stockbroking research analyst Bruce McLeary said the result was not surprising given two other big floats – toll road group Sydney Roads and construction-mining equipment group Emeco – had debuted at a discount.
He also said a pessimistic lead-up to the reporting season might have impacted as investors await results and commentary. "That didn't really help it (RiverCity) along its way," he said.
The overall market appetite for infrastructure projects varied according to pricing and the specific operation, he said.
Mr McLeary said RiverCity shares might trade similar to Melbourne toll-road group ConnectEast. It has remained in a relatively narrow band since listing in 2004.
He said shares could lift as the tunnel neared completion, as long as there were no construction problems.
"Particularly Brisbane-based investors, they'll be seeing the construction of it, they'll be hearing about it – that might generate some interest," he said.
The key milestone was when the tunnel opened for traffic, and would be affected by whether people drive through it and if the toll was too expensive, he said.
