In a letter to exchanges on Monday, Vodafone Idea stated: “We hereby notify you that the Board, at its meeting today on April 22, 2024, has endorsed and embraced the prospectus dated April 22, 2024 (the “Prospectus”), pertaining to the Offer.” Vodafone Idea’s FPO concluded on April 22.
Subscription details for Vodafone Idea FPO:
QIB: 19.31X
NII: 4.54X
Retail: 1.01X
Total: 6.99X
Vodafone Idea Share Price:
On Tuesday (April 23, 2024), Vodafone Idea surged almost 12% on BSE during the initial trading session following the closure of its follow-on public offer (FPO) and the board’s approval of the offer price.
Opening at Rs 12.99 on Tuesday, the stock climbed to its peak of Rs 14.43, marking an 11.95% increase from the previous close.
At 12:26 pm on Tuesday, the telecom giant’s stock traded 11.71% higher at Rs 14.40, up by Rs 1.51.
The FPO, bigger than Yes Bank’s ₹15,000-crore FPO in 2020, commenced for anchor investors on April 16 and for retail investors on April 18, concluding on Monday. Its shares will be listed on bourses on April 25.
As per BSE data, the nation’s third-largest telecom operator, aiming to utilize FPO proceeds for 5G service launch and transitioning existing 2G clients to 4G, received the highest oversubscription from foreign institutional investors among qualified institutional buyers, followed by mutual funds and domestic financial institutions. This share segment attracted bids totaling nearly ₹88,000 crore.
According to BSE data as of 7 pm, the non-institutional investor portion of shares saw a subscription of 4.54 times, whereas the retail investor portion was fully subscribed.
The company has secured ₹5,400 crore from anchor investors, comprising GQG Partners, Fidelity Investments, UBS Fund Management, Jupiter Fund Management, Australian Super, as well as domestic investors India Infoline, Motilal Oswal, HDFC Mutual Fund, SBI General Insurance, and Quant.
Last week, the carrier concluded allocation of 4.9 billion shares to anchor investors at ₹11 each. US-based GQG Partners received the largest share allocation valued at ₹1,345 crore, with Fidelity Investments investing approximately ₹772 crore in the FPO.
In a letter to exchanges on Monday, Vodafone Idea stated: “The Board, in its meeting on April 22, 2024, has approved and adopted the prospectus dated April 22, 2024 (the “Prospectus”), related to the Offer.”
Chief Executive Officer Akshaya Moondra informed Mint last week that the company would prioritize payments to vendors using proceeds from its equity fundraising. It has outstanding payments totaling an estimated ₹10,000 crore to vendors, which includes tower and network equipment providers.
The telco, currently without 5G services, has experienced a continuous decline in subscribers over multiple quarters. It aims to counteract this decline by enhancing the coverage of its existing 4G services and introducing 4G coverage in regions where only 2G services are available. This transition from 2G to 4G is expected to boost its average revenue per user (ARPU).
Moondra supported the necessity of increasing tariffs while also mentioning that the rise in ARPU would be influenced by OTT content aggregation. This, in turn, relies on digital distribution facilitated by telecom carriers.
It stated that the board meeting also passed the following resolutions:
a. The board determined and sanctioned the offer price of Rs 11/- per equity share.
b. The anchor investor offer price of Rs 11/- per equity share was approved by the board.
You might also be interested in – Today marks the opening of the Vodafone Idea FPO. Wondering if you should bid? Here’s the insight from GMP and experts on the ₹18,000-crore matter.
