Shares of Vodafone Idea Ltd bounced back by more than 14.4% in early trade on Thursday following the listing of securities issued in the follow-on public offering (FPO).
The shares started at Rs 11.80, but climbed to Rs 13.50 by 9:30 am, with buyers buying up shares close to the FPO price of Rs 11. In the previous trading session on Wednesday, the stock closed at Rs 13.10.
Investors saw a profit of about Rs 3,250 per lot of Vodafone Idea in the early session on Wednesday. Compared to the issue price of Rs 11 per share, this marked a 22.70% increase.
Trading in FPO shares begins at 9:15 am, the usual market opening time, after the pre-opening session. However, IPO shares usually commence trading at 10 am, following settlement at 9:45 am in the pre-market session.
Heavy trading volumes were witnessed on both BSE and NSE, with over 47.63 crore shares (Rs 612.76 crore) traded on BSE and 313.54 crore shares (Rs 3,906.72 crore) on NSE as of 9:38 am on Thursday.
Shivani Nyati, Head of Wealth at Swastika Investmart, said that the listing at around Rs 12 shows modest growth from the issue price, indicating initial selling pressure for short-term gains.
However, she suggested that a drop below Rs 11 is unlikely due to the company’s potential for turnaround.
“Positive signs and potential post-election tariff hikes could trigger fresh buying after this initial volatility. Aggressive investors with a long-term view might consider holding onto the stock, aiming for a potential rise towards Rs 18 in the future,” said Nyati.
The FPO of Vodafone Idea was open for bidding from April 18 to April 22, raising a total of Rs 18,000 crore through a fresh share sale of up to 16,36,36,36,363 equity shares. The issue was oversubscribed 6.36 times, with bids totaling around Rs 1,14,500 crore.
On a standalone basis, the quota for qualified institutional bidders (QIBs) was oversubscribed 17.56 times, while non-institutional investors subscribed 4.13 times. Retail investors’ portion saw a subscription of only 92% during the three-day bidding process.
The book running lead managers of the Vodafone Idea FPO are Jefferies India, Axis Capital, and SBI Capital Markets, with Link Intime India acting as the registrar for the issue.