Vodafone Idea has established the price range for its Follow-On Public Offering (FPO) at Rs 10-11 per share, indicating a lower end that is around 15% below the current stock price. In preparation for the FPO, the company has allocated 4.9 billion shares to anchor investors at Rs 11 per share, raising Rs 5,400 crore in total. The allotment process involved 74 different schemes in the anchor category, with notable subscribers like GQG Partners, Fidelity, Stichting, Redwheel, Motilal Oswal Mutual Fund, and Troo Capital.
The anchor allotment decisions were made following a 'capital raising committee' meeting that concluded late into the night on Tuesday. The FPO is scheduled to open for subscription on April 18 and close on April 22, with Wednesday being a market holiday. Noteworthy in terms of this anchor allotment is the substantial interest shown by various entities, with significant demand from investors like GQG Partners contributing to the positive momentum leading up to the FPO.
With a planned expenditure of Rs 12,750 crore on expanding 4G and 5G infrastructure, Vodafone Idea aims to reinforce its position within the competitive telecom market. The FPO, managed by Axis Capital, Jefferies India, and SBI Capital, will result in an increase in the company's paid-up capital and outstanding equity shares. While the FPO may lead to enhanced capabilities and subscriber retention, some analysts express concerns over whether the raised capital will be adequate given the company's substantial losses and competitive landscape challenges. The company's net losses and cash losses have persisted, raising questions about the sustainability of its operations post the FPO and highlighting the critical need for strategic investments and restructuring.