Virgin Australia shares surged 11.4% in its trading debut on Tuesday, lifting its market capitalisation to A$2.58 billion ($1.7 billion), with dealmakers hopeful it will revive Australia's subdued listings market.

Bain Capital’s Virgin Australia rose in Sydney trading after raising A$685 million ($444 million) in one of the country’s biggest initial public offerings of the year.The stock climbed as much as 9.7% to A$3.

Virgin Australia's shares have rallied by about 8 per cent as it has listed on the stock exchange five years after its collapse. The airline's initial public offering was priced at $2.90 per share, raising $439 million for the company.