On Thursday, the individual stock futures of VSNL for the June and July contract was trading at a hefty discount ranging between 11 and 13 per cent.
The average rate of VSNL futures on the National Stock Exchange (NSE) for the month of June and July was traded around Rs 163-165. On the cash market, the VSNL stock price closed at Rs 187, up Rs 3.80 on the NSE. The stock hit a high of Rs 188.80 and low of Rs 180.25.
Said an NSE derivatives dealer: In normal circumstances, most of the times, the price of a stock future trades slightly higher to the underlying cash market price because the futures price takes in to consideration the carrying cost.
Said the dealer: The main reason for the aberration in the stock of VSNL is because of low floating stock in the market following the open offer made by the Tatas.
The open offer of VSNL made by the Tatas opened on April 10, 2002 and closed on May 9, 2002. The open offer was at Rs 202 for 20 per cent of equity shares and was for 5.7 crore shares of VSNL. The subscription was done for around 8.5 crore shares.
Said dealers: Liquidity in VSNL stock has literally dried down as most investors and funds have tendered their shares in the open offer programme.
Said Prabhudas Lilladher retail head Vipul Shah: Most of the shareholders have tendered VSNL shares in the open offer are expecting to get the unaccepted shares anytime and these investors anticipate the rise in floating stock to impact the market.
Dealers said that a lot of negatives are attached with the VSNL stock: A slipping in the rates for international telephony impacting the bottomline of the company, and the present imbroglio between the government and the Tatas and others.
Said a dealer: The Tata-run VSNL boards decision to invest Rs 1,200 crore in basic telephony provider, Tata Teleservices (TTL) has been taken very badly by investors as the gestation period for any telephony provider is a minimum of four to six years.
Mr Shah said that investors were also disappointed as the reserves of VSNL is used for other purpose. This decision will also impact the dividend paying capacity of the stock in the future.