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Vodafone Idea FPO Subscribed Nearly 7 Times; Receives Rs 87,638.45 Crore!

22 April 20244 mins read by Angel One
Third-Largest Telecom Provider in India, Vodafone Idea FPO sees a lukewarm retail response (0.93x), but institutional investors show high enthusiasm.
Vodafone Idea FPO Subscribed Nearly 7 Times; Receives Rs 87,638.45 Crore!
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

Monday was an exciting day for Indian markets, with the Nifty and Sensex indices closing with gains of 0.77% and 0.86%, respectively. But the most significant development came from Vodafone Idea, whose follow-on public offer (FPO) saw a phenomenal response from investors.

Vodafone Idea FPO Oversubscribed

As of 3:57 PM, Vodafone Idea’s FPO was subscribed 6.96 times. Although retail investors showed a moderate response, with a subscription rate of 0.93 times, institutional investors were much more enthusiastic. The Qualified Institutional Buyers (QIB) category was oversubscribed by a whopping 19.31 times, while the Non-Institutional Investors (NII) category saw a 4.53 times subscription rate. On the final day of bidding, investors put in offers for a massive 7,967.13 crore shares against the 1,145.45 crore shares offered. This level of interest resulted in a total of Rs 87,638.45 crore being received through the FPO.

Investor Category Subscription (times)
Anchor Investors 1
Qualified Institutions (QIB) 19.31
Retail Investors 0.93

On the last day of the FPO, Vodafone Idea’s stock opened at Rs 12.40 but soon dipped below its 200-day moving average, hitting an intraday low of Rs 12.10. However, the stock made a strong recovery, closing almost flat at Rs 12.90 on the National Stock Exchange (NSE).

Anchor Book Raises Significant Funds

Vodafone Idea, the third-largest telecom provider in India by subscriber base, raised Rs 5,400 crore from institutional investors via the anchor book, with shares priced at the upper band of Rs 11. This round attracted a notable array of leading global and domestic investors, all of whom bought shares at the highest end of the price range.

Future Plans with the Funds

The company has outlined its plans for the newly raised funds. According to its red herring prospectus, Vodafone Idea intends to plug gaps in its 4G network by deploying the capital to install 26,000 new 4G sites over the next two years. Additionally, with this fundraising, Vodafone Idea will finally roll out its 5G network, a launch that has been delayed for nearly two years. However, it’s important to note that the initial 5G coverage will be minimal, with full expansion expected to take more time.

These developments indicate a significant turnaround for Vodafone Idea, signaling the company’s commitment to upgrading its infrastructure and improving its market position. Investors are now watching to see how this infusion of capital will impact the company’s operations and growth prospects in the coming years.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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