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Delphi Automotive (NYSE: DLPH) is in its first day of trading today after the auto parts maker’s initial public offering was priced at $22 a share on Wednesday, at the low end of its expected $22 to $24 range. The former General Motors (NYSE: GM) spin-off raised $530 million by selling 24.1 million shares in its IPO.

But Delphi won’t see a dime of its IPO haul. All of Delphi’s shares are coming from private investors in the company. A group of debt holders including General Motors, Silver Point Capital LP and Elliott Management took control of Delphi two years ago after the company emerged from bankruptcy protection. Delphi filed for bankruptcy in 2005.

The biggest beneficiary in Delphi’s IPO, however, is maligned hedge-fund manager John Paulson. He was listed as the seller of 20.6 million of Delphi’s 24.1 million IPO shares.

Delphi’s stock was already down more than 2 percent in mid-day trading, selling at $21.40 a share.

So let’s see: Bankruptcy, a falling share price and John Paulson. That hasn't exactly been a recipe for a successful stock of late. Earlier this year Paulson & Co. lost $468 million on its investment in disgraced Chinese forestry company Sino-Forest Corp. (OTC:SNOFF).

However, Delphi is a much different company than Sino-Forest, and has made some positive strides since coming out of bankruptcy. Its net sales rose 19.1 percent to $12.1 billion in the first nine months of this year. Delphi’s third-quarter earnings of $266 million were more than double what they were during the same quarter in 2010.

The company became profitable again last year after cutting costs and expanding its business in emerging markets such as China. Nearly a quarter of its 2010 net sales came from emerging markets in Asia and South America. Delphi has shifted 91 percent of its work force to those markets – a major contributor to its cost-cutting efforts.

Delphi professes to sell its products to the 25 largest auto makers in the world.

The company plans to use the money raised in its IPO to pay off debts and improve capital. Delphi’s mere presence in the stock market speaks volumes about the recent IPO boom and to some extent the recovery of the U.S. auto industry.

If a business so closely removed from bankruptcy can go public, it shows that the market is at least stable enough to convince more and more companies to dip their toe in the public pool.

Disclosure: None

Source: Recently Bankrupt Delphi Holds IPO Anyway