Vodafone Idea’s follow-on public offering (FPO), launched on Thursday, April 18, is set to close on Monday, April 22. Initial subscription figures reveal that qualified institutional buyers (QIBs) and non-institutional investors predominantly drove the subscription, with the overall subscription rate reaching 26% on the first day.
Retail investors accounted for only 6% of the shares allocated to them, while QIBs subscribed to 61% and non-institutional investors to 28%. Analysts anticipate stronger retail participation in the coming days, especially as larger retail applications, particularly those just below the ₹2 lakh threshold, are noted.
Market analysts highlighted the potential impact of geopolitical factors on the FPO’s performance, noting that despite market volatility, decent subscription numbers are expected, emphasized the significance of QIB subscription on the second day, which would signal positive market sentiment given the substantial size of the ₹18,000 crore issue.
As of Friday’s session at 09:34 IST, Vodafone Idea’s share price was trading 1.21% lower at ₹13.04 per share on the BSE.
The FPO, comprising freshly issued equity shares worth up to ₹18,000 crore, offers shares in the price band of ₹10 to ₹11 apiece. The company aims to utilize the proceeds for network infrastructure expansion, spectrum payments to the Department of Telecommunications (DoT), and general corporate purposes.
While brokerage firms like Swastika Investmart Ltd express optimism regarding the FPO’s objectives, they caution investors about Vodafone Idea’s financial challenges, including subscriber attrition and future obligations. Geojit Financial Services Ltd acknowledges the risk but recommends a ‘subscribe’ rating, particularly for investors with a high-risk appetite.
The grey market premium (GMP) for the Vodafone Idea FPO stands at ₹1.20, indicating investor willingness to pay a premium over the issue price. However, investors are advised to conduct thorough analysis and seek expert advice before making investment decisions.
Disclaimer: The views expressed by individual analysts and brokerage firms are their own and do not represent those of LegalParivar. Investors are urged to seek professional guidance before investing.
