Push start from Fidelity helped Ocado get its flotation away

Ocado had to rely on existing shareholders - and fund management group Fidelity in particular - to get its recent stock market flotation away.

Ocado only got its stock market debut away after existing shareholders in the loss-making online food distributor agreed to build their stakes substantially, with fund management group Fidelity lifting its holding to just over 13%.

Ahead of the flotation analysts had criticised the group's business model saying the initial offer price of 200p-275p per share overvalued the company. At the last minute, Ocado dropped the price to 180p. 

On the day shares were floated, chief executive Tim Steiner said that was done to ensure the group attracted 'quality' investors who are 'going to be very long-term supportive shareholders who truly understand our business.'

But the updates to the stock exchange show Steiner's roadshow around the world failed to attract many new investors willing to buy substantial holdings in the group.

Instead, Fidelity which has held shares since November last year now owns a 13.17% stake, having bought 30% of the new shares issued during the flotation and Generation Asset Management - run by former US Vice President Al Gore - bought 14% of the offer, bringing its total stake to 6.28%.

Between them the two investment groups bought just less than half of the new shares.

New investor Cayman based Nomad has acquired a 3.5% stake.

Steiner (pictured) had said many investors, who understood the business and were experienced in backing online companies such as Amazon, ASOS and Google, had bought shares, perhaps a reference to the fact that Fidelity was an early investor in Google.

A number of analysts had warned the money raised from the stock market flotation would be insufficient. One of them, Dave McCarthy at Evolution, said: 'The business needs more capital invested before it stands a chance of breaking even.'

Steiner dismissed the claim saying: 'That's rubbish. I am sure we have sufficient cash flow to grow the business very, very substantially from where we are today.'