Shares in the Siemens health technology unit surged nearly four percent to €29.10 ($35.80) at the start of trading in Frankfurt on Friday, which began some 45 minutes late because of a technical glitch affecting the blue-chip DAX index. The flotation earned Siemens €4.2 billion, and values the whole of the newly-listed company at €28 billion.

Healthineers' initial public offering (IPO) was tipped to be the largest on Frankfurt's blue-chip Dax index in over two decades when it was first announced by Siemens late last year Analysts had estimated the offering would generate some €9 billion.

But due to muted investor response it fell below the expected price range of between €26 and €31 per share. Siemens priced the 150 million shares up for grabs at €28 each — representing a 15-percent stake in Healthineers.

Read more: No time to rest as Siemens prepares for the future

Nevertheless, Siemens chief executive Joe Kaeser dismissed any suggestion that the pricing of the unit was disappointing, saying that a lower valuation would leave room for the stock to climb once it begins trading.

"I would hate to see the share fall the first day, and not go up relative to market," Kaeser told the British business daily Financial Times.

Robust health

One of Siemens' largest and most valuable divisions, Healthineers supplies hospitals around the world with everything from X-ray and MRI machines to lab diagnostics gear and robotic arms used in the operating theatre.

The unit is in robust health after achieving an operating profit margin of around 18 percent last year and revenues of €13.8 billion — second only to Siemens' flagship but troubled power and gas unit.

Healthineers' chief executive Bernd Montag has said the flotation would allow the unit to focus on being "a pure medical technology company", giving it "more flexibility" and the ability to raise its own capital for any future takeovers.

The stock market debut comes as the sprawling German industrial giant aims to restructure its businesses in response to changing markets and stronger competition. Observers say the parent company may use the IPO proceeds to support some of its less impressively performing offspring, notably the giant gas and power unit currently undergoing a painful restructuring.

Read more: Siemens invests in Brazil to 'unleash growth'

Last year, the group also announced a merger of its train construction business with French rival Alstom to create a European rail giant, merged its wind energy unit with Spain's Gamesa and unveiled plans to slash some 7,000 energy jobs due to falling global demand for its power plant turbines.

The last Frankfurt IPO of a similar size was 2016's listing of RWE's renewables spin-off Innogy, which raised around €4.6 billion.

uhe/jd (Reuters, dpa, AFP)