Vodafone Idea, a big name in India’s telecom scene, made a bold move on April 18, 2024. They launched its Follow-on Public Offer (FPO) valued at a hefty ₹18,000 crore. This move is crucial for the company as it faces tough financial challenges and aims to carve out a path for future growth and stability in an ever-changing market. The share is priced between ₹10-11 per share. The FPO wants to catch the attention of both big investors and regular people. The money collected will be used for projects like making 4G services better and getting ready for the new and exciting 5G technology.
Day 1 and Day 2 collections
The first day of the FPO saw a decent start with a 26% subscription rate. These share sales were primarily led by qualified institutional buyers (QIBs) and non-institutional investors. The issue received bids for about 3.31 billion shares, against 12.60 billion shares on offer. As the day wrapped up, data from the BSE Revealed how different types of investors were engaging with the FPO. The QIB quota showed a strong interest with 61% of its shares subscribed. Non-institutional investors, which include smaller firms and wealthy individuals, subscribed to 28% of the available shares, showing they were interested too. However, retail investors, who are everyday folks like you and me, were a bit more hesitant, only bidding for 6% of the shares set aside for them. Despite these varying levels of interest, Vodafone Idea’s stock (Vi) closed the day with a gain of 2.17%, reaching ₹13.20 on the BSE.
By the second day, the momentum picked up, and Vodafone Idea saw a surge in subscriptions. QIBs again led the way, with a whopping 93% of their share allocation. Non-institutional investors also showed significant interest, grabbing 75% of their portion, while retail investors, though improving, still took only 13% of their share. By the end of day 2, bids had been received for about 49% of the shares offered, and share price ended 2.12% lower at ₹12.92 apiece on BSE.
Purpose of the FPO
This move by Vodafone Idea isn’t just about raising money. It’s about tackling tough financial hurdles and positioning itself for a brighter future. VI have plans to amp up 4G services and dive into the world of 5G. It aims to stay ahead in the telecom game. The positive response from investors in the early days of the FPO speaks volumes about the company’s potential. But there are challenges ahead, and whether they succeed depends on a lot of factors. For now, everyone’s watching to see how it all plays out.
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