Powerful brands

The share issue raised $8.7bn for its owner Philip Morris, the owner of Marlborough cigarettes, which retained a controlling stake.

Just 16% of Kraft, the largest food manufacturer in the US and the second largest in the world after Nestle, was sold in the offering as 280 million shares were sold at $31 each.

The offering price valued the company at $53.8bn.

The stock closed up 25 cents at $31.25, a rise of 0.81%.

Second largest float

The flotation of Kraft was the largest stock float since AT&T Wireless's $10.6bn offering last year.

Following its $15.2bn purchase of Nabisco Holdings in December, Kraft owns some of the best-known names in the industry, including Kraft, Nabisco, Jell-O, Philadelphia cream cheese, Post cereals, Kool-Aid, and Maxwell House coffee.

Giant food company

Kraft raked in nearly $35bn last year, surpassing such rivals as Kellogg and General Mills, and putting it second only to Nestl�, which had revenues last year of $45.3bn.

Institutional investors like investing in Kraft's well-known - and well-trusted - brands.

"Kraft has a portfolio of high-quality brands as well as good visibility in those brands," said Tim Sharman, an analyst at Royal & Sun Alliance Investment Management in London. "It comes across very well, and it's a solid company."

Tobacco roots

Kraft was purchased by cigarette manufacturer Philip Morris in 1985 in the hopes of diversifying the company's holdings and revamping its image.

Kraft, unlike its parent, has a strong, positive reputation with the American public - something Philip Morris officials felt could be sullied if it did not spin-off the food unit.

Analysts point out that the stock float is just the first step toward a full spin-off that could see Kraft operating as an independent firm within two years.