Electrode maker De Nora had priced its IPO at 13.50 euros per share, at the bottom of its price range, valuing the 2.7 billion euros ($2.9 billion).

After opening down 0.6% at 13.40 euros, the shares extended losses and were down 2% at 0710 GMT, underperforming Milan's all-share index, down 1.4%.

The company is getting 200 million euros in fresh funds while existing shareholders including its founding family and Italian gas grid operator Snam will pocket 345 million.

Founded in 1923, the group is a leading manufacturer of electrodes for devices such as rechargeable batteries and also makes systems for water filtration and wastewater treatment as well as components to produce green hydrogen.

The Garrone Mondini family, which controls Italian energy company ERG, and the family office of Ruthi Wertheimer, which specialises in minority long-term investments in advanced technology industrial firms led by families and entrepreneurs, each pledged to invest up to 100 million euros in the IPO.

Rothschild is acting as advisor of San Quirico, the Garrone family's holding company.

(Reporting by Francesco Zecchini, writing by Keith Weir, editing by Giulia Segreti)