The allotment rights of Transgaz Medias (TGNR01) traded for an average price of 301.5 RON on the first day, 57% higher than the sale price of the shares during the offering, 191.92 RON.
Considering the small investor category was oversubscribed 11.3 times and since such investors got 11.3 times fewer shares than they paid for, the actual average yield was of about 5%.
As far as the large investor category is concerned, where the offer was oversubscribed by almost 39 times, the yield after the first day of rights trading should have been about 1.5% if they had blocked the entire amount subscribed. Most of the large investors, however, subscribed based on a letter of collateral from the banks whose clients they are, so that they did not have to transfer all the money to the broker's account.
The investors that subscribed in the small investor category with money borrowed from banks stood to gain. Those who borrowed to subscribe in the large category lost money.
An investor that borrowed 500,000 RON to subscribe in the small category could subscribe for 2,605 shares, and received 230 shares after allocation, worth 44,141 RON. If they sold their rights in the first day of trading for 301.5 RON, they made about 25,000 RON. With financing costs worth 1.5% to 3% of the borrowed sum, the investor has to pay the bank 7,500 to 15,000 RON, and therefore gets to keep between 10,000 and 17,500 RON.
On the other hand, an investor that borrowed 2 million RON to subscribe in the large category, could subscribe for about 10,421 shares and received 267 shares after allotment, worth 51,242 RON. If they sold the rights at the same average price of 301.5 RON, they made 29,300 RON, which does not cover the cost of financing that should amount to 30,000 RON, in case of a minimum fee of 1.5%.
Transgaz's allotment rights started trading at 321 RON, an incr
