Post FPO plans: Vodafone Idea to roll out 5G services after ₹18,000 crore fund raise, says CEO
Upstox
2 min read • Updated: April 15, 2024, 3:09 PM
Summary
The FPO will open on April 18, and the window to submit the bids will close on April 22. The price band is the range of ₹10-₹11 per share. This will be the biggest FPO in India, surpassing the ₹15,000 crore issue launched by Yes Bank in July 2020.
Vodafone Idea, India’s third major telecom sector player, will roll out the high-speed 5G internet services after the planned fund raise of ₹18,000 crore via the follow-on public offer (FPO), the company’s chief executive officer Akshaya Moondra said on Monday, April 15.
The telco is in possession of 5G spectrum in 17 priority circles, and is also equipped with 5G-related infrastructure, the CEO said during a presser, as per a CNBC-TV18 report.
The FPO will open on April 18, and the window to submit the bids will close on April 22. The floor price for the issue has been set at ₹10, and the price band is the range of ₹10-₹11.
As per the details shared by Vodafone Idea, the interested investors can place their bids for a minimum lot of 1,298 equity shares. At the upper end of the price band, one lot of the FPO would be worth ₹14,278.
Rivals move ahead with 5G
While Vodafone Idea is planning to roll out 5G after the FPO, rivals Bharti Airtel and Reliance Jio have already expanded the high-speed internet services network.
Both, Jio and Airtel, launched 5G in 2022-end, and began rolling out the services across several cities throughout 2023. In October 2023, Airtel claimed to have spread its ‘5G plus’ in over 500 Indian cities. Earlier, Jio claimed in March 2023 that it has extended its ‘True 5G’ services in 406 cities.
Vodafone Idea, which is facing a cash crunch, is expected to expedite the expansion of its 5G network after it mops up the funds through the planned FPO. Presently, the company is seen to be struggling in the Indian telecom market that is dominated by Jio and Airtel. At the end of February 2024, its subscriber base stood at 220.5 million, down 1 million as compared to the preceding month.
Biggest FPO on cards
Vodafone Idea’s FPO to raise ₹18,000 crore would be the largest offering of its kind in the Indian market. The biggest FPO so far was launched by Yes Bank in July 2020 to raise ₹15,000 crore.
Adani Enterprises' planned FPO of ₹20,000 crore last year would have surged past the issue size of Yes Bank's 2020 offer. However, the FPO was called off by the conglomerate following a damning report released against it by the US-based activist-short seller Hindenburg Group in January 2023.