Vodafone India FPO: Telco approves offer price of ₹11 per equity share, stock rises 8%

Vodafone India's Board has approved an offer price of ₹11 per equity share for the ₹18,000 crore follow-on offering (FPO). According to an exchange filing, the offer price for anchor investors is also ₹11.

Following the announcement, shares of Vodafone Idea were trading at ₹14, up 8.5%, on the NSE at 11:40 am.

Vodafone Idea FPO was subscribed nearly seven times. The company got bids worth ₹88,124 crore but will only retain ₹12,600 crore as ₹5,400 crore was collected from anchor investors.

Qualified institutional buyers brought 19.31 times the reserved quota, while non-institutional investors bid for 4.54 times the shares on offer. Retail investors, who were offered the biggest chunk, picked just a tad more than the number of shares offered to them.

Also read: Vodafone Idea FPO share allotment expected today: Steps to check status online

Shares were being offered in a price range of ₹10-11 per share, which is lower than the trading price.

The issue saw the highest-ever subscription in the qualified institutional buyers (QIBs) and HNI, as well as it is the first time that a sizeable retail portion of ₹6,300 crore was fully subscribed (at the upper end of the band). Listing of FPO shares is targeted for April 25.

Vodafone Idea sold shares worth ₹5,400 crore to institutional investors in the first phase last week.

Investment firms GQG and Fidelity picked up most of the shares during the anchor book allocation. Also, the promoters have pledged to infuse an additional ₹2,075 crore at ₹14.87 per share post shareholder approval in EGM scheduled on May 8.

The FPO is the largest ever. Prior to this, the largest FPO in the Indian market was a ₹15,000 crore share sale by YES Bank in 2020.

The fundraise would give the ailing telco the firepower to improve its positioning in the Indian telecom market, where it currently trails larger rivals such as Reliance Jio and Bharti Airtel, by a wide margin.

Of the total FPO proceeds, the company plans to use ₹12,750 crore for purchase of equipment for the expansion of its network infrastructure by setting up new 4G sites; expanding the capacity of existing 4G sites and for setting up new 5G sites, as per the share sale prospectus.

It will spend ₹5,720 crore of the ₹12,750 crore earmarked for network expansion on setting up its 5G network.

With PTI inputs