Food delivery business Deliveroo has said it will price shares for its stock market listing towards the bottom of its planned range.

Deliveroo now expects to be valued at between £7.6bn and £7.85bn, whereas its original price range had indicated it could be valued at up to £8.8bn.

It said it had chosen the lower price due to "volatile" market conditions.

Last week, a number of fund managers said they would reject the listing amid concerns over workers' rights.

'Significant demand'
Deliveroo's planned share sale has attracted much attention as it could be the UK's biggest flotation for a decade.

Last week, the company estimated a price range of between £3.90 and £4.60 per share for the float on Wednesday.

However, on Monday it trimmed the price range to between £3.90 and £4.10 per share.

In a statement, it said: "Deliveroo has received very significant demand from institutions across the globe."

It added that the deal is covered multiple times throughout the range, "led by three highly respected anchor investors".

But referring to "volatile global market conditions for IPOs", Deliveroo said it was "choosing to price responsibly within the initial range and at an entry point that maximises long-term value for our new institutional and retail investors."

The move comes after a number of US tech stocks fell below their issue prices after IPOs in recent weeks.

Fund worries
Despite the size of Deliveroo's flotation, last week a number of leading fund managers said they would reject the listing.

Managers such as Legal & General, Aviva, Aberdeen Standard and M&G expressed concerns over workers' rights, the company's business model and regulatory concerns.

Rupert Krefting, head of corporate finance and stewardship at M&G, said the company's reliance on gig-economy workers made it a risk for investors.

Deliveroo riders are self-employed, meaning they are not entitled to earn a minimum wage from the company, or holiday and sick pay.

David Cumming, chief investment officer at Aviva, warned of the risk that drivers will have to be reclassified as workers, which would entitle them to rights such as sick and holiday pay. "It's an investment risk if the legislation changes," he said.

One backer of takeaway delivery platforms is James Anderson, manager of the UK's largest investment trust Scottish Mortgage.

He told The Times that he was "lukewarm" about Deliveroo because of its focus on slower-growing markets and its over-reliance on London.

"I think their model is successful in the unusual economics of London and it's much more difficult to spread elsewhere," he said.

Investment firms have also raised concerns over the proposed share structure, which will see founder Will Shu have 20 votes per share, compared with one per share for other investors, giving him a majority position in shareholder votes.

Deliveroo, which was founded in 2013, has said it will hand its riders bonuses of between £200 and £10,000 when it floats, depending on the number of orders they have delivered.