Ser Educacional Falls After Shares Priced Below Range in IPO

Ser Educacional SA, the owner of 23 post-secondary schools in Brazil, fell on its first trading day after selling shares below its intended range.

The shares dropped 1.8 percent to 17.18 reais at the close of trading in Sao Paulo. The benchmark Ibovespa gauge fell 1 percent.

The company priced shares at 17.50 reais in its initial public offering, below the 19.50 reais to 23.50 reais it estimated in a prospectus. Ser Educacional and its shareholders are raising as much as 539 million reais ($247 million) by selling 15.4 million new and 15.4 million existing shares.

Ser Educacional’s sale was the second IPO by a Brazilian education company this month after Gaec Educacao SA raised as much as 468 million reais on Oct. 24. Gaec has gained 2.3 percent from the initial price to 18.93 reais.

Providers of higher education have benefited as Brazil’s government cut interest rates and eased repayment terms on student loans to swell the ranks of doctors, lawyers and engineers in Latin America’s largest economy. Kroton Educacional SA is the fifth-best performer on the Ibovespa this year and while Estacio Participacoes SA has rallied 22 percent.

Ser Educacional’s and Gaec’s IPOs were the first in Brazil since David Neeleman’s air carrier Azul Linhas Aereas Brasileiras SA canceled an offer of as much as 1 billion reais in August.

After the best start of a year since 2007, with seven sales valued at $7.7 billion, IPOs in Brazil dried up as investors fled volatility in the world’s worst-performing major stock market. The Ibovespa gauge is down 16 percent in dollar terms in 2013, compared with a decline of 1.9 percent for the MSCI Emerging Markets Index of 21 developing nations’ equities.

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