Vodafone Idea rebounds from early jitters, FPO shares deliver 23% return on listing

Shares of Vodafone Idea Ltd rebounded more than 14.4 per cent during the trading session on Thursday after the securities issue in the follow-on public offering (FPO) were listed the bourses for the session.

Vodafone Idea kicked-off the trading session at Rs 11.80 at initial tick but was seen at Rs 13.50 as of 9.30 am, as the session progressed and the buyers lapped up the shares near the FPO price of Rs 11. The stock was settled at Rs 13.10 in the previous trading session on Wednesday.

Each lot of Vodafone Idea delivered a profit of about Rs 3,250 to the investors in the early session on Wednesday. Compared to the issue price of Rs 11 apiece, the stock was up 22.70 per cent.

One should note that unlike IPO shares trading in FPO shares begin at 9.15 am only, which is the usual opening time for the markets, after the pre-opening session. However, trading in IPO shares usually begins at 10 am after settling at 9.45 am in the pre-market session.

More than 47.63 crore shares of Vodafone Idea, amounting to Rs 612.76 crore were traded on BSE as of 9.38 am on Thursday. Similarly, 313.54 crore shares amounting to Rs 3,906.72 crore exchange hands on NSE as of the same times, suggesting heavy trading volumes in the counter.

Commenting on the listing and heavy volumes of Vodafone Idea, Shivani Nyati, Head of Wealth, Swastika Investmart said that listing around Rs 12 is a modest increase from the issue price as it reflects initial selling pressure for short-term gains. However, a drop below Rs 11 seems unlikely given the company's turnaround potential.

"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," she suggested.

The FPO of Vodafone Idea was open for bidding between April 18 and April 22. The biggest FPO of Indian stock markets raised a total of Rs 18,000 crore, which was entirely a fresh share sale of up to 16,36,36,36,363 equity shares. The issue was overall subscribed a total of 6.36 times, fetching bids for around Rs 1,14,500 crore.

On a standalone basis, the quota for qualified institutional bidders (QIBs) was booked 17.56 times The quota for non-institutional investors was subscribed 4.13 times. The portions reserved for retail investors saw bidding for only 92 per cent during the three-day bidding process.

Jefferies India, Axis Capital and SBI Capital Markets are the book running lead managers of the Vodafone Idea FPO, while Link Intime India is the registrar for the issue.