Shares of Vodafone Idea climbed nearly 4% in opening trade on Tuesday after its ₹18,000 crore follow-on public offer (FPO), the largest so far by an Indian company, was subscribed over 6 times on the last day of bidding. The FPO, which breached the record of ₹15,000 crore by YES Bank in 2020, was overall subscribed 6.36 times on the back of strong response from qualified institutional buyers (QIBs) and non institutional investors (NIIs). The issue by the cash-strapped telecom company was subscribed nearly 6 times on the last day (Monday), after getting subdued response in the first two days of bidding. The issue was booked 0.29 times on Day 1 (April 18) and 0.54% on Day 2 (April 19) at the upper end of price band at ₹11 per share. The FPO shares will be listed on the bourses on April 25.
Boosted by the development, shares of Vodafone Idea gained as much as 3.95% to ₹13.40 on the BSE, while the market capitalisation rose to ₹66,460 crore. Early today, the telecom stock opened higher at ₹12.99 against the previous closing price of ₹12.89, snapping two sessions losing streak.
Vi shares touched its 52-week high of ₹18.42 on January 1, 2024, and a 52-week low of ₹6.26 on April 24, 2023. The counter has rallied 111% in the past one year; 22% in six months; and nearly 1% in a week. On a year-to-date (YTD) basis, the stock has fallen over 21% as investors booked profit at higher levels.
The exchange data showed that the quota reserved for QIB was booked 17.56 times, followed by 4.13 times in NIIs category. The portion set aside for retail investor was subscribed 0.92 times.
The QIB quota received bids for 6,321 crore shares against 360 crore on offer, while the NII portion garnered bids for 1,114 crore shares against 270 crore on offer. In comparison, the retail segment failed to receive an overwhelming response from investors, getting bids for 576 crore shares against 630 crore on offer.
Ahead of the opening of the FPO, the company raised ₹5,400 crore through anchor book, which saw participation from some marquee investors such as GQG Partners, The Master Trust Bank of Japan, UBS, and Morgan Stanley Investment Management, among others.
The company intends to use the FPO proceeds to boost its capex and expand 4G coverage, 5G network rollout and capacity expansion. Additionally, it aims to pay certain deferred payments for spectrum to the DoT and the GST with additional funds and also use them for general corporate purposes.
As of December 31, 2023, the total gross debt (excluding lease liabilities and including interest accrued but not due) stood at nearly ₹2.15 lakh crore, which comprised deferred spectrum payment obligations of ₹1.38 lakh crore and AGR (adjusted gross revenues) liability of ₹69,020 crore.
Earlier this month, the board approved a proposal to raise ₹2,075 crore from promoter Aditya Birla Group, which owns 10.59% stake in Vodafone Idea. The company will issue up to 1,395,427,034 equity shares of face value of ₹10 each at an issue price of ₹14.87 per equity share, aggregating to ₹2,075 crore to Oriana Investments Pte Limited, on a preferential basis. Oriana Investments is an entity under the Aditya Birla Group, which is a promoter of the telecom company.
In Q3 FY24, telecom major Vodafone Idea saw its net loss narrowing to ₹6,985 crore, as against ₹7,990 crore net loss in the same period last year. The average revenue per user (ARPU) of the company, however, rose 7.5% year-on-year to ₹145 from ₹135 in Q3 FY23. On the operating front, EBITDA grew 6.8% YoY from ₹2,000 crore in Q3 FY23 to ₹2,140 crore, the highest in the last 11 quarters. 4G subscriber base rose to 12.55 crore as compared to 12.10 crore in Q3 FY23.
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