Vodafone Idea FPO Day 3: Success! Oversubscribed by Investors (What to Expect Now)

Vodafone Idea FPO Day 3 Update: FPO receives overwhelming response! Explore investor interest and what comes next for Vi.

Vodafone Idea FPO Day 3 ( image credit: Google/hindustantimes

By Financial News Desk | Mumbai | April 22, 2024

In a significant development for the Indian stock market, the Vodafone Idea Follow-On Public Offer (FPO) has successfully concluded its third day of bidding. The FPO, valued at an impressive ₹18,000 crore, is the largest follow-on public offer ever in India. Here’s what investors need to know:

  • Full Subscription:

The FPO was fully subscribed on the last day of bidding, with investors eagerly participating. A total of 1,289.8 crore equity shares were lapped up by investors, reflecting strong demand for Vodafone Idea’s shares.

Notably, Vodafone Idea is the third-largest telecom operator in India, trailing behind Reliance Jio and Bharti Airtel.

  • Investor Response:

Non-Institutional Investors (NIIs) showed remarkable enthusiasm, oversubscribing their quota by 2x.

Qualified Institutional Buyers (QIBs) also demonstrated confidence in the FPO, oversubscribing by 1.34x.

Retail investors, however, have taken up only 43 percent of their allotment so far.

  • Anchor Investors:

Prior to the FPO, anchor investors contributed significantly. Investment firms GQG and Fidelity played a pivotal role, raising ₹5,400 crore.

By the end of day 2, Vodafone Idea had already raised over ₹12,000 crore, including the anchor investor contributions.

  • Challenges Ahead:

While the FPO’s success is encouraging, analysts advise caution. Vodafone Idea faces ongoing challenges, including:

Continued Losses: The company has been grappling with financial losses.

Cash Burn: High operational costs and debt repayment obligations.

Hyper-Competition: Intense rivalry from Reliance Jio and Bharti Airtel.

  • Listing Expectations:

Investors should not expect significant listing gains. The sheer size of the FPO may attract funds, but prudent decision-making is essential.

Analysts recommend evaluating the risks and considering the long-term prospects of Vodafone Idea.

In summary, Vodafone Idea’s fully subscribed FPO marks a crucial milestone for the company. However, investors must weigh the risks and make informed choices based on their investment goals and risk tolerance.

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