Vodafone Idea shares jump over 6% a day after FPO subscribed 6.5x

It further mentioned that the board meeting also passed the following resolutions:

a) Determined and approved the offer price of Rs 11/- per equity share.

b) Approved the anchor investor offer price of Rs 11/- per equity share.

The Rs 18,000 crore FPO of Vodafone Idea sailed through on Monday. The issue was booked 6.5 times overall on the last day of the bidding process.

Ahead of the offer opening, Vi raised over Rs 5,000 crore from nearly 60 anchor investors, making it the third-largest anchor book after One 97 Communications and Life Insurance Corporation.

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VI is the third largest telco in India based on subscriber base. The company is raising funds for capex purposes of increasing its network infrastructure by expanding the capacity of the existing 4G sites and setting up new 4G and 5G infrastructure as well.

The company said it expects to roll out 5G services in select pockets in 6-9 months of the issue. The 5G rollout will cover 40% of the company's overall revenue base in the next 24-30 months.

VI has not been able to roll out 5G services because of a lack of funds. It can be noted that both its rivals and Reliance Jio -- to whom it has ceded market share -- have been active on 5G for some months now.

While the fund-raise should improve the company's near-term fortunes, analysts don’t expect the company to gain any meaningful market share from peers and remain concerned about potential large equity dilution.

However, the issue should help bridge the network coverage gap and improve competitiveness versus peers.

At 10:38 am, the stock was trading 6.1% higher at Rs 13.6 on BSE. However, year-to-date, the stock has fallen nearly 20%. Nevertheless, it has rallied 111% in the last one year.

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