The Spanish subsidiary of the Romanian telecommunications group Digi has gone public. After several months of waiting and an initial attempt thwarted by geopolitical instability, the company began trading on the Spanish stock exchanges this Thursday with an initial price of €5,6 per share. The operation, which combines a capital increase and a sale of existing shares, raised approximately €287 million in its debut.
The debut wasn't entirely smooth. Although the shares surged by 7% in the first few minutes , reaching €6, the trend reversed throughout the session, and the stock closed at €5,15, representing an 8,04% drop. Despite this initial setback, demand during the offering was very high, with bids quadrupling the available supply, according to financial sources.
A bittersweet debut on the trading floor
Digi Spain Telecom's initial public offering (IPO) took place with a valuation of €1.662 billion, significantly lower than the €2.000-2.500 billion range considered in the first attempt in April. The subsidiary's CEO, Marius Varzaru, explained that the priority was not to maximize the price, but rather to secure a long-term investor base . In fact, the final price represents a 15% discount compared to the initial valuations.
The transaction is structured in two tranches: a primary offering of 26,8 million new shares for €150 million, and a secondary offering of 24,5 million existing shares owned by the Romanian parent company, Digi Romania, for €137 million. In addition, a greenshoe option for up to 7,695 million additional shares has been included, which could raise the total amount to approximately €330 million. Barclays is acting as the stabilizing entity , and the stabilization period will extend until August 15.
Offer details
The success of the placement has been underpinned by the presence of a major anchor investor. The Domínguez de la Maza family, owners of Mayoral , has committed €100 million through its Global Portfolio Investments vehicle, becoming the second-largest shareholder with 6% of the capital . Alongside them, some 50 institutional investors, including Amundi, Bestinver, and Wellington, have also acquired shares. The Romanian parent company retains at least 80% of the capital, ensuring its control.
Regarding corporate governance, Digi Spain's board of directors is chaired by Serghei Bulgac, the group's global CEO, and includes Marius Varzaru as vice chairman and CEO. Independent directors include Carlos Robles, former managing director of Carlyle, and Virginia Arce, former partner at PwC and current vice chairwoman of Indra. The company has launched an incentive plan for 120 key employees , offering 900.000 shares valued at approximately €5 million at the initial public offering price. Varzaru receives 400.000 shares (€2,24 million), and the deputy CEO, Catalin Neagoe, receives 40.000 shares.
Investors and corporate governance
The funds raised will be primarily used to finance the company's ambitious expansion plan in Spain. Digi plans to invest €400 million in 2026 and another €900 million between 2027 and 2029 to deploy its fiber optic network to 21 million premises by 2030, compared to the current 13,7 million. In the mobile sector, the antenna network will grow from the current 1.100 to 5.000 in 2028 and 10.000 in 2033.
However, the subsidiary's financial situation presents challenges. Digi Spain has accumulated a negative cash flow of €450 million over the last three fiscal years, and its net debt is around €650 million, with a debt-to-EBITDA ratio of 2,9 times. Analysts are confident that cash flow will turn positive in about three years , when a critical mass of customers will allow the low-price model to become profitable. The company does not plan to distribute dividends until at least 2030 and will reinvest all generated cash in growth.
Expansion plans and financial situation
The Romanian parent company, listed in Bucharest, has used the transaction to reduce its own debt, netting €137 million from the share sale. Furthermore, Digi plans to place an additional 5% of its capital on the market within one to two years through a secondary offering of existing shares, once the 180-day restriction period expires. According to Varzaru, this option would allow the group to pursue inorganic acquisitions without resorting to further debt.
Digi Spain's stock market debut is the second this year on the Spanish stock exchange, following TSK's IPO, and has generated considerable excitement due to the operator's growth trajectory. With over 10,8 million customers, a 12% market share in mobile and 14% in broadband, the telecom company has become a disruptive player thanks to its tariffs, which are up to 40% cheaper than those of its competitors. However, the price war and aggressive offers from competitors have hampered its customer acquisition rate in recent months. Despite the drop on its first day of trading, the company is confident that its organic growth strategy and the backing of institutional investors will allow it to consolidate its position in the Spanish market.
