Vodafone Idea's ₹18,000 cr FPO fully subscribed on Day 3

Vodafone Idea's ₹18,000 crore follow-on public offer (FPO) was fully subscribed on the third day, with the cumulative demand schedule on the BSE showing the issue has subscribed 2.18 times.

India’s biggest FPO by the cash-strapped telecom service company received a strong response from qualified institutional buyers (QIBs), with the quota subscribing 4.81 times.

As of 2.09 pm, the non-institutional investors' quota was subscribed 2.52 times. Overall, investors placed their bids for 2,150.5 crore shares against 1,260 crore on offer.

The QIB quota received the maximum response, with the category receiving bids for 1,423 crore shares against 360 crore on offer. The NII quota received bids for 673 crore shares against 270 crore on offer.

The company failed to receive an solid response from the retail investors as around 325 crore shares were bid for against 630 crore scrips on the offer, thus subscribing 0.52 times.

Vodafone Idea Ltd has already raised ₹5,400 crore via anchor book, with investors including GQG Partners, The Master Trust Bank of Japan, UBS, and Morgan Stanley Investment Management, among others, participating in the anchor book.

The third largest telecommunications service provider in the subscribers base allocated 490,90,90,908 shares to the anchor investors at the top end of the price band, i.e. ₹11 per equity share.

A total of 74 anchor investors participated in the anchor book, raising ₹5,399 crore for the company. The bids for the FPO of Vodafone Idea opened on April 18, 2024, and will close on April 22, 2024. 

The floor price of the offer was ₹10 per equity share, and the board approved the cap price at ₹11 per share, with a minimum bid lot of 1,298 equity shares and in the multiples thereafter. 

Meanwhile, the shares of the company dropped 4.18% during the intra-day trade to ₹12.38 on the BSE on Wednesday, with its m-cap sliding to ₹61,998.22 crore.

Notably, Vi’s funding plan had been pending for a long time. Its equity raising is expected to boost capex and enable the rollout of 5G services. Beyond that, the telco also faces a financial crunch in FY26 CL when annual spectrum and AGR payments of $4 billion per annum will fall due, unless the government converts debt principal to equity at the end of the moratorium. 

The latest data from telecom regulator TRAI reveal Vodafone Idea (VIdea) reported a loss of 1m subscribers to 221m in Feb-24 and a 17m loss over the past 12M.

In Q3 FY24, the telecom major saw its net loss narrowing to ₹6,985 crore vs ₹7,990 crore loss in the same period last year. The average revenue per user (ARPU) rose 7.5% year-on-year to ₹145 from ₹135 in Q3 FY23.

The total equity share capital of the company stands at 5,012 crore shares (pre-offer), with promoter holdings at 40.06% and promoter group holdings at 8.69%. The company's public shareholders stand at 2,560 crore. Post-offer, after the offering of 16,36,36,36,363 shares, the total number of equity share capital will increase to 6,648 crore, with the promoter holding down to 30.30% and the promoter holding at 6.57%.