Vodafone Idea tumbles 10% after listing of FPO shares today
Vodafone Idea shares tumbled 10% to Rs 11.8 in Thursday's NSE trading session following the listing of its follow-on public offer (FPO) shares on the bourses. However, the shares opened at a 7.2% premium compared to their FPO issue price of Rs 11.
tumbled 10% to Rs 11.8 in Thursday's NSE trading session following the listing of its follow-on public offer (FPO) shares on the bourses. However, the shares opened at a 7.2% premium compared to their FPO issue price of Rs 11.By 10:29 am, the stock rebounded, trading 1% higher at Rs 13.22 from its previous day's close of Rs 13.1. Compared to the FPO price of Rs 11 per share, the stock was trading 20% higher.
"While Vodafone Idea's FPO listing around Rs 12 is a modest increase from the issue price, it reflects initial selling pressure for short-term gains. However, a drop below Rs 11 seems unlikely given the company's turnaround potential. Positive signs and potential post-election tariff hikes could trigger fresh buying after this initial volatility," said Shivani Nyati, Head of Wealth, Swastika Investmart.
"Aggressive investors with a long-term view might consider holding onto the stock, aiming for a potential rise towards Rs 18 in the future," Nyati said.
The Rs 18,000 crore FPO, which is the largest India has seen so far, received decent from investors overall, but most of the heavy listing was done by institutional and non-institutional investors.
The part reserved for QIB and NII investors was booked just over 19 times and 4 times, respectively. Meanwhile, the retail portion was subscribed to just 1.01x, which meant that the retail investors got what they bid for.
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.
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 within 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.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
