Prior to the launch of its follow-on public offer (FPO) today, Vodafone Idea witnessed a surge of over 4% in its share price. On Tuesday, April 16, the company successfully raised approximately ₹5,400 crore through its FPO, with support from anchor investors like GQG Partners, UBS Fund Management, Jupiter Fund Management, Fidelity Investments, and Australian Super. Today, Vodafone Idea’s share price opened at an intraday low of ₹13.08 on BSE, reaching a high of ₹13.48.
Technical analysts suggest that Vodafone Idea’s stock is undergoing a short-term consolidation phase, with strong support levels observed in the range of ₹12–11.50, indicating limited downside potential.
Vodafone Idea FPO Details and Subscription
The Vodafone Idea FPO subscription period commences today, April 18, and will run until Monday, April 22, starting at 10:00 IST. The price band for the FPO is set between ₹10 to ₹11 per share, with bids allowed in multiples of 1,298 equity shares and a minimum bid limit of 1,298 equity shares.
The total offer size of the Vodafone Idea FPO includes a fresh issue of equity shares aggregating up to ₹18,000 crore.
Utilization of Proceeds as Per Red Herring Prospectus (RHP)
As outlined in the red herring prospectus (RHP), the net proceeds from the FPO will be allocated as follows: (i) ₹12,750 crore for equipment acquisition to expand network infrastructure, including establishing new 4G and 5G sites, and augmenting capacity; (ii) ₹2,175 crore for payment of deferred payments for spectrum to the Department of Telecommunications (DoT) and GST thereon; and (iii) the remaining amount for general corporate purposes.
Brokerage Recommendation and Target Price
Brokerage IIFL Securities suggests subscribing to the FPO and has upgraded Vodafone Idea to ADD with a target price of ₹14. They estimate that the company will receive ₹45,000 crore in capital infusion from the equity offering, which should aid in narrowing the gap with competitors in 4G coverage and capacity, and accelerate the transition of 2G customers to 4G.
Disclaimer: The views and recommendations expressed above belong to individual analysts, experts, and broking companies, and not to LegalParivar. Investors are advised to consult certified experts before making any investment decisions.
