Vsnl Gdr At 25%Premia

Videsh Sanchar Nigam Ltd has made a spectacular debut on the international market, climbing more than $2.50 in the first few hours after the GDR was listed at $13.93 on the London Stock Exchange on Monday. By yesterday, it had climbed to $17.50, commanding a premium of 25.6 per cent over the initial listing price.

The higher-than-expected pricing of $13.93 (equivalent to Rs 1,000 since two GDRs represent a share) represented a 1.5 per cent premium on VSNLs closing price of Rs 985.25 on Friday.

On the Bombay Stock Exchange, VSNL closed at Rs 1070 and a total of 86,400 shares worth Rs 9.24 crore were traded.

 

On the National StockEexchange, the scrip opened at Rs 1039, but slumped to Rs 985.25 at close; 26,200 shares worth Rs 2.58 crore were traded on the exchange.

VSNLs $448 million GDR issue is the largest ever by an Indian company. This includes 3.9 million shares disinvested by the government and a 12.165 million-share initial public offering by VSNL.

VSNL will decide on the 2.835 million share greenshoe option in a few days. VSNLs equity of Rs 80 crore will increase to Rs 95 crore after the GDR-cum-public offer issue.

After the GDR offering the government stake in VSNL has dropped from 82 per cent to slightly over 66 per cent.

A merchant banker said buying demand stayed strong throughout the day and there were indications that the runaway demand had triggered some surprise sellers. There have been quality buyers and quality sellers.

Merchant bankers say that the deal has been one of the hottest this year. VSNLs lead managers said it was 10 times oversubscribed though this was partly caused by inflated orders.

Of course, a lot of that was just froth. A lot of people who thought they wouldnt get allotments asked for more than they wanted, says one merchant banker.

VSNLs runaway success is expected to give a fillip to the governments disinvestment programme. The disinvestment programme should be back on course after this, said a merchant banker.

The successful completion of the VSNL deal has come as a enormous relief to the issues lead managers Kleinwort Benson and Salomon Bros. The lead managers had faced strong criticism for the failure to get the deal through earlier.