Vodafone FPO sails through, subscribed seven times on final day

Vodafone Idea’s ₹18,000-crore follow-on public offering, the largest to date, sailed through on Monday, with bids from all categories of investors.

The issue was subscribed 6.99 times, with bids for 8,011 crore shares against 1,145.45 crore shares on offer as of 5 pm. The portion for qualified institutional buyers was subscribed 19.3 times, while that for non-institutional investors was oversubscribed 4.5 times at the upper end of the price band. The retail portion was subscribed one time. In all, the FPO received 11,59,356 applications.

• Also read: Vodafone Idea FPO gets fully subscribed

The Vodafone FPO was a fresh issue of 1,636.36 crore shares, with a price band of ₹10-11 per share. The company had earlier raised ₹5,400 crore from anchor investors.

The amount collected through the FPO is in addition to the ₹2,075-crore infused by the Aditya Birla Group through a preferential issue. Promoters’ equity (Vodafone Plc, Aditya Birla Group) will reduce to 37.3-38.2 per cent from 50 per cent. The government’s stake in the telco will be cut to 24 per cent from 33 per cent after the shares are issued.

• Also read: IPO screener: Vodafone Idea FPO closes today

Network expansion

Vi believes that the fundraising will help better its 4G network and launch its 5G network. The FPO draft prospectus stated that the firm will add 26,000 new 4G sites in the next two financial years.

Vi is likely to commence the process of raising debt of ₹25,000 crore from banks soon. “We are looking at overall funding which is primarily meant for growth capex. Dues to vendors, banks, spectrum and AGR will be met by internal cash generation and the new funding in the form of equity and debt is meant for growth capex,” Vodafone Idea CEO Askhay Moondra told businessline in a recent interview.

Vodafone Idea’s RHP, however, noted that as of December 2023, the firm had ₹13,807 crore owed trade payables or vendor payments which will be cleared after the FPO.

Vodafone Idea shares were volatile but ended flat on Monday, down 0.2 per cent at ₹12.89 on the BSE.