Vodafone Idea FPO Opens for Subscription – Check Details


by Sandip Das on 18 April 2024,  4 min read


Vodafone Idea Ltd’s Follow on Public Offer (FPO) commenced its subscription phase on April 18, generating remarkable interest within the first hour as bids poured in, amounting to 1 percent of the total subscription. This enthusiastic response underscores the market’s anticipation surrounding the offering. The FPO presents an opportunity for various investor segments, including retail investors, employees, high net-worth individuals (HNIs), and qualified institutional buyers (QIBs), to participate in the company’s growth trajectory.

Notably, both retail investors and HNIs have swiftly taken up their allotted quota, each securing 1 percent. The HNI segment, comprising non-institutional investors, has shown considerable interest by bidding for 2.86 crore shares against the reserved portion of 270 crore shares. However, as of now, no bids have been received for the QIB portion.

The FPO mandates a minimum bid limit of 1,298 equity shares, with the flexibility to place bids in multiples of 1,298 equity shares. Investors have until April 22 to subscribe to the offering, with the price band set between Rs 10 to Rs 11 per share. The company aims to raise a substantial Rs 18,000 crore through this FPO, signaling its intent to bolster its financial position and pursue strategic initiatives, according to a moneycontrol.com report.

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The infusion of capital from the FPO is pivotal for Vodafone Idea Ltd, given its existing debt obligations and the imperative to strengthen its operational infrastructure. A significant portion of the proceeds, amounting to Rs 12,750 crore, is earmarked for the acquisition of equipment essential for expanding its network infrastructure. This includes the deployment of new 4G and 5G sites and the augmentation of existing capacities, thereby enhancing its service offerings and market competitiveness. Additionally, around Rs 2,175.31 crore will be allocated towards deferred payments for spectrum to the Department of Telecom and GST obligations. The remaining funds will be utilized for corporate purposes, potentially including debt repayment and working capital requirements.

Prior to the FPO launch, Vodafone Idea Ltd successfully raised Rs 5,400 crore from various institutional investors through an anchor book launched on April 16. This pre-FPO fundraising initiative witnessed participation from 74 institutional investors, reflecting confidence in the company’s prospects. Notable investors include GQG Partners, Morgan Stanley, Fidelity, FIAM Group, UBS Fund Management, The Master Trust Bank of Japan, and HDFC Mutual Fund.

The Rs 18,000-crore FPO forms a crucial component of the company’s broader capital-raising strategy, aimed at garnering a total of Rs 45,000 crore through a combination of debt and equity. This comprehensive approach underscores Vodafone Idea Ltd’s commitment to fortifying its financial position, enhancing its operational capabilities, and sustaining its growth trajectory in the dynamic telecommunications landscape.

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Source: moneycontrol.com

Disclaimer: The information provided in this blog post is for informational purposes only and should not be construed as investment or trading advice. The author is not a financial advisor and does not have any professional qualifications in this area. The author does not guarantee the accuracy or completeness of the information provided. Any action you take based on the information in this blog post is done at your own risk. Please consult with a financial advisor before making any investment.

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