UPDATE 3-Germany's IONOS prices IPO at bottom of range

(Updates with final price)

Feb 7 (Reuters) - German web hosting company IONOS on Tuesday priced shares for its initial public offering (IPO) at the bottom of its target range, as investors took a cautious approach to the first major European flotation since carmaker Porsche in September.

IONOS's shares will debut at 18.50 euros ($19.88) apiece when they list on the Frankfurt Stock Exchange on Wednesday, its parent company United Internet said in statement.

That will give IONOS a market capitalisation of around 2.6 billion euros.

The stock's target valuation ranged from 18.50 to 22.50 euros per share.

The flotation was seen as a test of investor appetite for new publicly traded companies after IPO activity plunged in 2022.

Investors expected an "icebreaker" discount for IONOS, a source previously told Reuters, to entice them to buy into the deal.

Should banks exercise an "over-allotment" option to issue additional shares, United Internet and minority partner Warburg Pincus will reap total proceeds of 447 million euros from the IPO.

The company will have a free-float of 17.3% if all shares are placed.

($1 = 0.9308 euros) (Reporting by Friederike Heine and Pablo Mayo Cerqueiro; Editing by Arun Koyyur and Mark Potter)