Shares of Vodafone Idea (Vi) recovered their initial losses and rose up around 6% even as 16.36 billion new shares – allotted through the follow-on public offering (FPO) – flooded the market on Thursday. The stock closed at Rs 13.89 per share on the BSE, which is over 26% higher than the FPO price of Rs 11.
The company’s Rs 18,000-crore FPO, which is the largest-ever secondary share sale in India, received bids for 6.4x the number of shares that were on offer.
Calling it the beginning of Vi 2.0, Aditya Birla Group chairman Kumar Mangalam Birla said the fundraise is a “fresh lease of life”.
“The robust engagement from both foreign and domestic investors is heartening. Notably, the full subscription of the retail portion is truly commendable, given the sheer scale of the offer,” Birla said at the bell ringing ceremony of FPO shares on Thursday.
Birla said the successful completion of the FPO marks one of the key turning point for the telecom industry, which has been punctuated by many events and milestones in the last 17 years since Idea Cellular’s listing.
Shivani Nyati, head of wealth at Swastika Investmart, said while the initial selling pressure was on account of investors looking for short-term gains, she does not expect the stock to drop below Rs 11 given the company’s turnaround potential. “Aggressive investors with a long-term view might consider holding onto the stock, aiming for a potential rise towards Rs 18 in the future,” Nyati said.
Merchant bankers said that around 0.9 million shareholders got added to Vodafone Idea with this FPO, and that the average ticket size of retail investors was Rs 60,000.
Together on the NSE and the BSE, more than 10.5 billion shares of Vodafone Idea changed hands on Thursday, nearly 11 times higher compared to the average 1-month trading volume of around 980 million as on April 24.
However, several retail investor and dealers said they faced technical glitches on the NSE while trading in Vodafone Idea shares initially in the day after the FPO listing. Retail investors, who were allotted 35% of the FPO shares worth Rs 6,300 crore, took to social media to complain about not being able to execute trades.