The stock price of Fairway Group Holdings Corp (NASDAQ:FWM) surged by almost 42 percent on its initial public offering (IPO).

Fairway Group Holdings Corp

The company initially offered its stock at $13 per share, and it went up as high as $18.41 per share during early morning trading. The stock is trading around $17.15 per share, up by 32 percent, around 3:00 pm in New York.

In a statement, Fairway Group Holdings Corp (NASDAQ:FWM) said it was given a valuation of $536 million based on its IPO price and the company expects to receive $159 million net proceeds from its first day of trading. The company raised $177.5 million after selling 13.65 million shares for $13 per share.

According to the company, it will use its net proceeds from the offering to open new stores and for general corporate purposes after paying $78.6 million of accrued but unpaid preferred stock dividends, a management agreement termination fee, and management bonuses.

In a statement, Charles Santoro, executive chairman of Fairway Group Holdings Corp (NASDAQ:FWM) said, “We are thrilled to participate in the NASDAQ opening bell ceremony as a newly listed company. The bell ringing is a wonderful way to celebrate this key milestone for our company and to acknowledge the commitment and support of our employees, customers, and investors.”

Fairway Group Holdings Corp (NASDAQ:FWM) started as a small fruit and vegetable stand in a corner in New York City. The stand grew and became a leading food retailer in the Greater New York City metropolitan area.

Fairway Group Holdings CEO Hern Ruetsch said, “We are proud of our achievements and the part we play in supporting the communities that we serve. We look forward to building on our success by continuing to serve our customers with great food, great service, and value.”

The company’s business expanded into 12 locations in New Jersey and Connecticut. Based on its filing with the Securities and Exchange Commission (SEC), the company is planning to open stores in highly populated metropolitan areas.

Last year, Fairway Group Holdings recorded $554.9 million sales and $11.9 million net loss. The company sells organic milk and baby food as well as gluten-free breads and pancake mix. Its competitors include Whole Foods Market, Inc. (NASDAQ:WFM), Trader Joe’s, Target Corporation (NYSE:TGT), and Wal-Mart Stores, Inc. (NYSE:WMT).