Vodafone Idea FPO: Telecom Operator To Sell Rs 18,000 Cr Worth Shares At Discounted Price – Check Key Dates And Other Details (image source: Vi/ https://www.myvi.in/)
Vodafone Idea FPO: In a bid to address its debt burden, Vodafone Idea, the troubled telecom operator, has announced to sale offer of shares worth Rs 18,000 crore in its forthcoming Further Public Offering (FPO). The FPO is scheduled to take place from April 18 to April 22, with shares priced in the range of Rs 10-11 per share.
Pricing Strategy: Discounted Rates for Investors
The pricing strategy for the FPO entails a price band of Rs 10-11 per share. Notably, the higher end of this band, Rs 11, represents a substantial discount. It stands at a 26 per cent discount compared to the recently approved preferential issue price to the promoter entity, which was set at Rs 14.87 per share. Additionally, it marks a 15 per cent discount compared to the last closing price of Rs. 12.95.
Board Decision and Application Details
The decision regarding the FPO was made following a board meeting held by the company earlier today. The floor price for the FPO has been established at Rs 10 per share, with a cap price of Rs 11 per share. Investors interested in participating in the FPO must apply for a minimum bid lot of 1,298 shares, with multiples thereafter.
Anchor Investor Bidding: Scheduled Opening
Bids for anchor investors are set to open on April 16. Vodafone Idea stated in a filing, “A meeting of the Capital Raising Committee is scheduled to be held on 16 April 2024 for the purposes of allocation of Equity Shares to the successful Anchor Investors pursuant to the Offer and for determination of the Anchor Investor Allocation Price.”
Market Reaction and Share Performance
Following the announcement of the FPO, Vodafone Idea shares experienced a decline of over 3 per cent, reaching a day’s low at Rs 12.51. Despite this, the stock has demonstrated significant growth over the past year, more than doubling in value.
Strategic Funding Initiatives: Prior Approvals and Financial Context
Recently, the board of Vodafone Idea, a loss-making telco, approved a preferential share issue to raise Rs 2,075 crore from an Aditya Birla Group (ABG) entity. This approval laid the groundwork for a broader funding program crucial to the revival of the financially strained telco.
Vodafone Idea Financial Outlook
In the March quarter, Vodafone Idea is expected to report a loss of 4.5 million subscribers compared to the previous quarter’s loss of 4.6 million subscribers. Analysts anticipate that Vi will add 1 million 4G subscribers, leading to a slight increase in Average Revenue Per User (ARPU) to Rs 147. Despite this, overall revenue is projected to decline marginally by 0.8 per cent quarter-on-quarter experts predict that margin growth will remain relatively flat, with a marginal increase of 10 basis points quarter-on-quarter to 40.9 per cent, primarily attributed to lower marketing expenses.
