Medibank Private has debuted 11 per cent higher than its initial public offering price.

The IPO priced shares at $2 for retail shareholders and $2.15 for institutional shareholders, but demand for the stock saw it open at $2.22.

ASX Listings business development manager Rory Cunningham said at present the highest buyer for Medibank is at $3.75, while the lowest is at $1.75.

Finance Minister Mathias Cormann said there were more than $5 billion in retail bids for the private health insurance IPO.

"We about to transfer ownership of Medibank Private to about 400,000 individual shareholders," Mr Cormann said prior to ringing the bell for trade to go live.

"This process has been so successful because of the professionalism of everyone associated with the sale."

The offer raised $5.679 billion for the government and is the second largest IPO on record in Australia. Telstra is the biggest at $US10 billion when it listed in November 1997.

CLSA analyst Jan van der Schalk said the Medibank Private listing was an expensive call on structural, government-led, change.

"Medibank's CEO & management have been in place for 12 years. We are told this is a cost-out story: maybe, but we wonder why this mob should suddenly be good at running an efficient shop?" Mr van der Schalk said.

"In an effort to cut costs, what are the potential downstream impacts of their actions? If lowering expenses is so easy, why hasn't it been done before? We see only issues with this strategy."

More to come