At £2.25 a share, the major insurance companies and institutions which invest funds on behalf of clients believe they are getting the shares in First Active at a knock-down price and are content with their lot.

The same couldn't be said though for the more than 13,000 bank members who opted to immediately cash-in their shares, inevitably raising questions about the timing of the long-awaited flotation.

Fund managers believe they have picked up a bargain. For the past couple of weeks, they had firmly let the company know they were only interested in buying their shares at a certain price. With financial stocks losing ground by the day - and good value available in other markets - that price was always going to be a lot less than First Active was initially hoping for. "Today we are very happy buyers. We are quite pleased. It's a good price to buy in at," according to one fund manager. "For once we are getting into a stock that wasn't dressed up at a high price or whitewashed to look good. It's an unusual situation for new shares to be issued at such an attractive price."

First Active has put a brave face on the what must be a disappointing turn of events. Just last month, it told members their shares would be valued at between 265p and 380p, promising a potential windfall of - at best - more than £1,700 for each qualifying account. The company was confident at the time that the shares would be issued towards the upper end of that range, depending on market conditions of course.

Even if the shares had started trading in the middle of this range, the 450 share allocation would be worth just £1,500 as it started trading.

When the board met to set the share price last Friday, the directors knew they must pitch the shares at a level that would ensure they would not drop in value, when the began trading on the Dublin and London markets. It also had to get the institutions "on board" and try to keep its members reasonably happy.

Group deputy managing director, Mr Tony Shanahan, believes it got the price about right, although some fund managers suggests First Active could have comfortably borne a price of 250p, even in the current volatile environment. Mr Shanahan says this is a matter of opinion.

"We will find out over the next few days." The board is "not disappointed" with events, he insists. "On balance it has been very successful."

No one could have foreseen the troubles which have beset the stock markets, particularly over the past six months. Despite the increasingly bearish outlook over that period, First Active was determined to go ahead with the flotation where other companies, such as Parc and Goldman Sachs, decided to postpone their debut.

Mr Shanahan argues it was right to go ahead. "We did monitor changes on a day to day basis and consider the advantages and disadvantages of a delay or otherwise. In a family-owned company, achieving the maximum price for their shares in the market is the main objective. But in a demutualisation, it is just a conversion, and timing is less of an issue."

If it did postpone, he argues, First Active would have to wait for months before it could come back to the market, leaving it clouded in uncertainty and incur further costs. At the lower price, First Active had to issue a further seven million new shares to raise the total £104 million from investors, leaving the company 80 per cent owned by its members while the institutions took the remaining 20 per cent stake.

First Active will be hoping that members will retain a long-term interest in the group, although institutions are expected to increase their stake, buying up members shares as they come on the market. A recovery in the market will help to support a stronger share price in the future and members who hold their shares over the long terms should realise solid investment gains.

The relatively cheap price of £2.25 is based on the prevailing price for financial stocks in the Irish and London markets, which are now at historically low levels. In the long-term the price will be driven by the level of growth in First Active's day-to-day operations and the overall environment for financial stocks.