Vodafone Idea FPO: share jumps to 10% while the FPO allotment catches focus

The Indian market saw the completion of the largest follow-on public offering of Vodafone Idea on Monday, followed by a 10% surge in share price on Tuesday. This surge was fueled by strong buying activity, particularly in telecom stocks. The stock opened at Rs 13 per share and quickly hiked to Rs 14.75. However, it later experienced a slight decline to Rs 14.30. Despite this fluctuation, the share price still reflected a 10% increase from Monday’s closing value of Rs 12.90 on the NSE.

The Vodafone Idea FPO took place from April 18 to April 22, offering shares within the fixed price range of Rs 10-11 per share, with a lot size of 1,298 shares. Through this follow-on offering, the company successfully raised a total of Rs 18,000 crore. This amount was generated solely through the sale of fresh shares, totaling up to 16,36,36,36,363 equity shares by its promoters and other shareholders.

The grey market premium (GMP) of Vodafone Idea has seen a significant rebound after bidding closure. The latest update indicates that the company is currently commanding a premium of Rs 1.20 per share. This suggests a potential listing gain of approximately 10-11% for investors. However, the GMP stood at around Rs 0.50 on the final bidding day and rose to Rs 1.70 before the bidding commenced.

Struggling with debt, Vodafone Idea, ranked as the third largest telecom operator in India, intends to utilise Rs 12,750 crore of the net issue proceeds to enhance its network infrastructure. This involves establishing new 4G and 5G sites and bolstering the capacity of existing 4G sites. In a press statement released, Vi announced that it has secured Rs 5,400 crore from 74 anchor investors. Notable investors include GQG Partners, The Master Trust Bank of Japan, UBS, Morgan Stanley Investment Management, Fidelity, Quant, Citigroup Global Markets, Australian Super, and Motilal Oswal.