Prominent telecom operator Vodafone-Idea Limited (Vi) has recently revealed its plans to initiate a follow-on public offer (FPO) aiming to raise INR 18000 Cr. The FPO subscription is scheduled to commence on April 8th with a floor price set at INR 10 per share and a cap set at INR 11. The offering is set to conclude on April 22, with anchor bids set for approval on April 16th, according to a stock exchange filing by the Vodafone Idea (Vi).
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Largest FPO in the Indian Market
The FPO is expected to be one of the largest of its kind in India. The company has enlisted the Jefferies, SBI Caps and Axis Capital as lead managers. With investors able to bid for a minimum lot of 1298 equity shares, the minimum application amount stands at INR 14,278 for one lot of shares, based on the upper end of the price band. Subsequent bids can be made in multiples of 1298 equity shares.
Financial Strategy and Recent Developments
The Board of Vi approved the decision to pursue the FPO and raise INR 20,000 Cr via equity. The company recently raised INR 2075 Cr through the issuance of preferential shares to one of its promoter entities, Oriana Investments Private Limited. Additionally, the operator is reportedly in discussions with the banks to secure debt funding, aiming for a total fundraising of INR 45,000 Cr through a combination of equity and debt.
Market Analysis and Investor Outlook
However, a brokerage firm CLSA has expressed concerns about Vi’s performance, suggesting that its share price may fall by half i.e. to INR 5. The brokerage has also highlighted the loss of 17 million subscribers in the last year and potential financial challenges in fiscal FY26, especially spectrum and AGR payments. Despite doubling its value over the past 12 months. Vi’s stock has recovered 30% recently. As of the April 12 session, the stock is in F&O restrictions, preventing the creation of new positions.
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Future Steps and Regulatory Compliance
Vodafone Idea will decide on the FPO price range and discount through its process in four weeks and the management team plans to conduct roadshows and individual interactive sessions with investors and research analysts. The Subsidiary Investment will be conducted without registration of the shares issued under this FPO under the U.S. Securities Act of 1933 and will not be sold within the United States unless under specific exemption conditions.
