Vodafone Idea shares fall 4% ahead of FPO launch

The net proceeds will be utilized to purchase equipment for expanding its network infrastructure, including setting up new 4G sites, expanding the capacity of existing 4G sites, and establishing new 5G sites. An amount of Rs 12,750 crore will be allocated for this purpose.

Additionally, the company will allocate Rs 2,175 crore for the payment of certain deferred payments for spectrum to the Department of Telecommunications (DoT) and the Goods and Services Tax (GST). The remaining amount will be allocated for general corporate purposes.

"Vi’s Rs 18,000 crore FPO is a step in the right direction (albeit much delayed) and should help bridge the network coverage gap and improve competitiveness versus peers. Further, with a sharp reduction in Vi’s bank debt, we believe Vi will be able to secure further funding from banks," Kotak Institutional Equities said.

"We raise our FY2025-26E EBITDA sharply on lower subs declines post fundraise and higher ARPU. Rating remains suspended for now," it said.

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Investors have to apply in a minimum bid lot of 1,298 shares and in the multiples of 1,298 shares thereafter.

Bids for anchor investors would be open on April 16. "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," Vodafone Idea said in a filing.

Axis Capital, Jefferies India, and SBI Capital are the lead managers of the FPO.

At 10:13 am, the scrip was trading 3.6% lower at Rs 12.68 on the BSE. Over the past one year, the stock has delivered impressive returns of 110% to its investors. However, year-to-date, it has declined by 25%.

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