B&M Bargains has set its offer price at 270p, valuing the discount retailer at £2.7bn and catapulting it into 10th place by market capitalisation.

The valuation positions B&M ahead of established names such as Home Retail, Dixons and Ocado in terms of market capitalisation.

Meanwhile, My Sale, the flash Sales site that Arcadia tycoon Sir Philip Green invested in last month, has set its offer price at 226p, valuing it at £340m. The etailer is launching on AIM.

B&M’s IPO is set to raise £1.08bn, of which the retailer will receive £75m with selling shareholders, founders the Arora family, and private equity firm Clayton, Dubilier & Rice receiving the remaining amount. The free float will be 40% of the business.

Conditional dealings began today at 8am, with unconditional dealings beginning on Tuesday next week.

B&M chief executive Simon Arora said: “We are delighted that investors have demonstrated their support for B&M and its growth story in the value sector and that they share our excitement about the group’s future.  

“We believe that becoming a public company gives us the right long-term ownership model, allowing us to build on our strong track record as we move to the next stage of development. We look forward to continuing to offer incredible value to our loyal customers, to bring the B&M experience to more people as we roll out stores and to breathe life into high streets and retail parks across Britain, creating thousands of jobs each year.”

B&M’s valuation puts it far ahead of other retail floats this year, including Ao.com’s £1.2bn and Pets at Home’s £1.3bn listings.

It comes at a time when investor appetite seems to have waned for retail stock. Game Digital last week floated with a market valuation of £340m, down from the £400m originally mooted.

And last month Card Factory also listed at its lower price of 225p to 240p per share, from the original price guidance of between 250p-300p per share, valuing it at £776m. Meanwhile, Fat Face abandoned its £400m float plans in May blaming “retail IPO indigestion”.

Apart from Poundland and Shoe Zone, all retail IPOs this year are trading at below their float price.