Vodafone Idea shares rally over 14%, snap 2-day losing streak after strong FPO subscription

Vodafone Idea Ltd (VIL) shares rallied more than 14% on Tuesday, snapping the two days of losses after its follow-on public offer closed with a strong subscription.

Vodafone Idea shares jumped as much as 14.35% to hit an intraday high of ₹14.75 apiece on the NSE at 12:30 pm.

Shares of India’s third-largest telecom services provider declined more than 2% in two days as its ₹18,000 crore FPO opened for subscription on April 18. The FPO was priced at a discount to trading price at ₹10-11 per share.

Vodafone Idea FPO subscribed over six times

Vodafone Idea FPO closed with an overall subscription of over 6 times on the last day of bidding on Monday, April 22. A strong demand from qualified institutional buyers (QIBs) for the FPO surprised the markets.

The company set aside 50% of the issue size to qualified institutional buyers. Around 15% of the FPO size was for non-institutional investors and the remaining 35% for retail investors.

Ahead of the launch of the FPO, Vodafone Idea also saw a good response form the anchor investors. The anchor investors, led by US-based GQG Partners put in around ₹5,400 crore in the round. Fidelity Investments put in around ₹772 crore in the pre-FPO round.

The ₹18,000-crore FPO of Vodafone is the largest by an Indian company so far. Previously, YES Bank raised ₹15,000 crore through an FPO in 2020.

Vodafone Idea Ltd had proposed to use the FPO proceeds to upgrade its 4G network infrastructure as well as set up 5G network sites. It seeks to upgrade 2G customers to 4G.

Vodafone Idea is expected to finalise share allotment on Tuesday, April 23. The new shares will be listed on the stock exchanges on April 25.

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