Vodafone Idea has attracted significant interest in its follow-on public offering (FPO), with bids amounting to $10.6 billion (~ ₹8,82,651 crores INR). This is part of the company's broader plan to raise $2.16 billion through the FPO, which marks the largest of its kind in India. Investors bid for 80.12 billion shares which was 6.36 times the number of shares on offer, at a price band of 10-11 rupees per share.
The funds raised from this FPO are intended to help Vodafone Idea expand its network services and catch up with larger rivals in the telecom industry. The company plans to use the capital to roll out its 5G network service and expand its 4G coverage, aiming to cover 40% of its revenue base with 5G service in the next two to two-and-a-half years.
This move comes as Vodafone Idea seeks to strengthen its position in the market, despite a decline in its subscriber base from 228.6 million a year before to 215.2 million as of the end of December. The company's efforts to raise funds also included selling shares worth 54 billion rupees to institutional investors earlier this month.
It's a strategic step for Vodafone Idea as it competes with other major players like Bharti Airtel and Reliance Jio, who have already launched 5G services in most parts of the country.
The Vodafone Idea follow-on public offering (FPO) has been a significant event not in telecom industry but in the Indian stock market as well. Here are the key details:
- FPO Dates: The FPO opened for subscription on April 18, 2024, and closed on April 22, 2024.
- Price Band: The price band for the issue was set at ₹10 to ₹11 per share.
- Issue Size: The FPO was an entirely fresh issue of 16,363,636,363 shares, aggregating up to ₹18,000.00 crores.
- Allotment Date: The allotment for the FPO was expected to be finalized on April 23, 2024.
- Listing Date: The tentative listing date for the FPO is April 25, 2024, on both BSE and NSE.
- Subscription: The subscription status was 6.36 times the number of shares offered, with qualified institutional buyers (QIBs) subscribing 19 times.
- Use of Proceeds: Of the total proceeds, Vodafone Idea proposes to use ₹12,750 crores for network infrastructure expansion, including setting up new 4G and 5G sites. Additionally, ₹2,175.31 crores has been set aside for deferred spectrum payments and GST.
This FPO is part of Vodafone Idea's broader strategy to strengthen its financial position and expand its network services to compete more effectively with other major telecom players in India.
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