ITI on Tuesday extended its follow-on offering (FPO) by three days and lowered the price band after failing to garner full subscription. ITI is a government-owned technology firm operating in the telecom sector.
The lower end of the price band has been revised from Rs 72 per share to Rs 71 per share. So far, the FPO has garnered only 50 per cent subscription. Shares of ITI extended their losing streak to close at Rs 83 on the BSE. Ahead of the FPO, the stock traded above Rs 90 per share.
Through the FPO, the company is looking to mop up around Rs 1,300 crore. The FPO will lead to 20 per cent dilution.
Analysts say while the FPO pricing was at a discount to the market price, the adjusted price, after factoring the dilution, works out less than Rs 80 per share. “Besides the pricing, investors are concerned over the drop in profitability of the company last financial year and the business outlook, given ITI’s maximum business comes from state-owned telecom companies, which aren’t in the best shape,” said an analyst.
Currently, the government holds a 90 per cent stake in the company. The last FPO to hit the market was in 2014 by state-owned Engineers India. ITI’s FPO will now close on Friday.
Source: Maalaimalar
