UPDATE 4-Deliveroo dives 30% as London debut of the decade turns torrid

* Banker blames shift away from COVID plays to recovery
plays

* Amsterdam stock market hits high, led by tech stocks

* Deliveroo has 1 billion pounds to invest in growth
(Adds quote, performance of peers)

By Abhinav Ramnarayan and Julien Ponthus

LONDON, March 30 (Reuters) - Shares in Deliveroo
plunged by as much as 30% in their trading debut on Wednesday,
slicing more than 2 billion pounds off the company's valuation
in a blow to Britain's ambitions to attract fast-growing tech
companies to the London market.

The highly-anticipated listing, the biggest on the London
market in a decade, had been hailed by British finance minister
Rishi Sunak as a "true British tech success story" that could
clear the way for more initial public offerings (IPO) by
technology companies.

But the debut had already been overshadowed as some of
Britain's biggest investment companies shunned the listing,
citing concerns about gig-economy working conditions and the
share structure.

The 390 pence price tag gave an overall valuation of 7.6
billion pounds ($10.46 billion) and was already set at the
bottom of a target range.

Within minutes of the market opening on Wednesday, it lost
2.28 billion pounds of its value, which equity capital markets
bankers said could undermine the market for some IPOs in Britain
and Europe.

Fabian de Smet, head of investment banking at Berenberg,
called it a "sector problem".

"Investors are turning away from the work-at-home play and
putting their money into the economic recovery play. Deliveroo
got caught in the middle of a huge rotation. It was the last IPO
of the old COVID world," he said.

Having hit a low of 271 pence, the stock recovered to 289
pence by 1130 GMT.

Shares often rebound on their market debuts as the managing
banks make use of the over-allotment, or greenshoe - a
percentage of the offer reserved to stabilise the price.

One trader, speaking on condition of anonymity, told Reuters
he had seen no buyers for the stock at 1000 GMT.

Deliveroo customers, who were allocated 50 million pounds of
shares, are only able to trade on April 7, when unconditional
trading begins.

AMSTERDAM HIGH

The stock's fall follows a poor run for many growth stocks.
Its main peers Just Eat Takeaway.com and Delivery Hero
have fallen around 12% each in the past month.

U.S. peer Doordash - which doubled in value on its stock
market debut last year - has fallen as much as 40% over the last
month.

But those stocks have steadied in the last two sessions, and
the Amsterdam stock exchange hit a record high on Wednesday, led
by tech stocks.

A source familiar with the Deliveroo deal, asking not to be
named, said it was not just about one day's trade and the
company had raised 1 billion pounds to invest in the business
and new technologies.

PANDEMIC BOOM

Deliveroo's self-employed drivers have seen a boom in demand
during the pandemic, bringing food from otherwise-shuttered
restaurants to house-bound customers.

But the Amazon-backed company has been running at a hefty
loss; it said it narrowed an underlying loss to 223.7 million
pounds ($308.93 million), from 317.3 million pounds in 2019.

Irrespective of profitability, there has been a clamour for
growth companies over the last year as the COVID-19 crisis has
pushed interest rates and government bond yields to all-time
lows.

But with U.S. Treasury yields rising, this trade has lost
allure and many tech stocks on both sides of the Atlantic have
fallen in recent weeks, leading to questions over inflated
valuations.

"That comes back to the issue that how could a company that
was valued at 3 billion (pounds) in November, 5 billion in
January, be magically worth 8-9 billion in March - particularly
when according to its own statements it was potentially in need
of emergency funding last year," Russ Mould, Investment Director
at AJ Bell, said.

The listing of the London-based company, founded by boss
William Shu in 2013, is London's biggest IPO since Glencore's in
May 2011 and also the biggest tech float yet on the London Stock
Exchange.

The heavyweight investors that stayed away included Aberdeen
Standard Life, Aviva, Legal & General Investment Management and
M&G.

"The number of institutions lining up to say no on ESG
(environmental, social and corporate governance) grounds always
looked like it was going to make it a tricky debut," said James
Athey, investment director at Aberdeen Standard Investments.

Goldman Sachs and JP Morgan are leading the deal, while Bank
of America, Citi, Jefferies and Numis are also part of the
syndicate of banks managing the transaction.

(Reporting by Abhinav Ramnarayan and Julien Ponthus; Additional
reporting by Arno Schuetze, Elizabeth Howcroft and Tom Arnold,
Graphic by Dhara Ranasinghe
Editing by Rachel Armstrong and Barbara Lewis)