Vodafone Idea FPO: 10 things to know about India’s largest follow-on public offer

Vodafone Idea IPO: The price band for the issue has been fixed at Rs 10-11 per share

live bse live

nse live Volume Todays L/H More ×

Vodafone Idea’s follow-on-public offer is set to open on April 18. If successful, this will be India’s biggest FPO, surpassing YES Bank’s Rs 15,000 crore share sale in July 2020. Adani Enterprises’ Rs 20,000 crore FPO was fully subscribed but later cancelled in February 2023.

Here are 10 key things to know before subscribing to the offer:

Story continues below Advertisement Remove Ad

1) FPO Dates

The FPO will open for subscription on April 18 and close on April 22, 2024.

2) Price Band

The price band for the issue has been fixed at Rs 10-11 per share.

3) Offer Details

The follow-on public offer is entirely a fresh issue of shares. Half of the FPO size has been reserved for qualified institutional buyers, 15 percent for non-institutional investors, and the remaining 35 percent for retail investors.

Story continues below Advertisement Remove Ad

Story continues below Advertisement Remove Ad

4) Objectives of Issue

Of the total FPO proceeds, the telco proposes to use Rs 12,750 crore for the purchase of equipment for the expansion of its network infrastructure by setting up new 4G sites; expanding the capacity of existing 4G sites and setting up new 5G sites. Rs 2,175.31 crore from the FPO proceeds has been set aside for deferred payments for spectrum to the Department of Telecom and the GST. The remaining funds will be used for general corporate purposes.

5) Lot Size

Investors can bid for a minimum of 1,298 equity shares and multiples of 1,298 after that. Hence, the minimum investment by retail investors would be Rs 12,980 (1,298 (Lot size) x 10 (lower price band)). At the upper end, the bidding amount will increase to Rs 14,278.

Also Read: Vodafone Idea FPO to improve competitiveness with rivals; meaningful market share gains unlikely: Analysts

6) Company Profile

Vodafone Idea is the third-largest telecommunications service provider in India based on subscriber base and sixth largest cellular operator globally in terms of number of subscribers in a single country of operations. The company offers voice, data, enterprise and other value-added services (VAS), including short messaging services and digital services across 2G, 3G and 4G technologies.

7) Financials

The company has incurred a loss of Rs 23,564 crore for the nine months ended December 31, 2023, while the revenue rose to Rs 32,045 crore. Average Revenue Per User (ARPU) rose to Rs 145. The net worth stands at negative Rs 97,932 crore. As of December 31, 2023, the total debt (including interest accrued but not due) of the group stands at Rs 2.15 lakh crore. The existing debt as payable by December 31, 2024, is Rs 5,385.4 crore.

8) BRLMs

The book-running lead managers of the FPO are Jefferies, Axis Capital and SBI Capital Market while Link Intime is the registrar.

9) Risks

(i) As of December 31, 2023, the company has a significant amount of outstanding dues payable to vendors, particularly tower vendors and equipment suppliers.

Also Read: How Vodafone Idea plans to spend its Rs 18,000 cr FPO proceeds

(ii) The company incurred losses during recent periods and may not achieve or sustain profitability in the future.

(iii) The company has a high level of debt.

10) Listing Date

The basis of allotment will be finalised by April 23 and shares will be credited to demat accounts by April 24, as per the RHP.