Investor appetite for the JSE`s newest company has taken the market by surprise.
This morning, Blue Label Telecoms, a supplier of prepaid products, electronic tokens and transactional service offerings to retailers and wholesalers, listed on the main board of the JSE.
Despite the company`s shares being listed at R6.75 - giving it a market capitalisation of nearly R5 billion - Blue Label opened at R9. Within minutes, over a million shares traded for a total of R10 million.
An analyst, who asked to remain unnamed, said the hefty appetite was both expected and a surprise.
"We did expect great interest in the share due to the high levels of interest in the private placement. We also hear that the private placement was around 10 times oversubscribed, so that prepared us for some interesting volumes at opening.
"What was a surprise was the price people are willing to pay for their shares. R9 is significantly higher than what we expected to see. Then again, I believe the closing price is going to be far more indicative of a settled interest," he says.
Blue Label CEO Mark Levy confirms the private placement was "between 10 and 11 times oversubscribed".
"We had phenomenal interest during our pre-listing roadshow. The people that we spoke to were quite obviously moved by our story and vision. That said, I am more excited about where we will be in the future than where we are today. And companies like Microsoft appear to feel the same way," he says.
Global software vendor Microsoft is to acquire about 12% of the issued shareholding in Blue Label Telecoms. Levy points out that Microsoft`s interest in Blue Label is not just around its South African operations.
"I don`t believe that enough attention is being given to our international operations. And I believe that it is this that Microsoft is interested in. India, for instance, is a huge opportunity for us - when we started as a virtual distributor in that market, it had around 12 million cellphone subscribers. Now it has 200 million. Our opportunities here are huge," he explains.
As for future prospects, Levy says the company is considering growing geographically and by acquisition.
"But we are in no hurry to do this - India, for instance, is almost like a continent on its own. We will consider geographic growth, but I must stress we are very big on doing our homework first. As for acquisitions, we will consider opportunities along vertical lines which provide us access to areas like prepaid water, bus services and the like," he concludes.
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