## Vodafone Idea's FPO Garners Strong Investor Interest
Shares of Vodafone Idea surged on Tuesday, following the successful completion of its Rs 18,000 crore follow-on public offer (FPO). The FPO, India's largest, was subscribed 6.4 times, with strong demand from both domestic and international investors.
The qualified institutional buyer (QIB) portion of the share sale was subscribed 17.6 times, with 82% of the bids coming from foreign portfolio investors (FPIs). The high networth individual (HNI) portion also saw strong demand, garnering 4.13 times subscription. However, the retail portion remained undersubscribed, receiving bids for only 92% of the shares on offer.
The strong investor response is a positive sign for Vodafone Idea, which is looking to raise funds to strengthen its 4G services and prepare for the upcoming 5G rollout. The company recently received a Rs 2,075 crore fund infusion from the Aditya Birla Group, further bolstering its financial position.
Analysts believe that the equity infusion will enable Vodafone Idea to narrow the 4G coverage gap with its competitors and upgrade its 2G users to 4G. This, coupled with direct tariff hikes, is expected to drive the company's average revenue per user (ARPU) from Rs 145 in Q3FY24 to Rs 241 in FY27.
Additionally, there is a possibility of a favorable verdict in the AGR curative petition, which could provide Vodafone Idea with significant relief on its Rs 70,000 crore AGR dues. If the government converts Rs 35,000 crore of these dues into equity, analysts believe the company's target price could reach Rs 14 per share by June 2025.
Overall, the successful FPO and strong investor interest are positive developments for Vodafone Idea. The company is well-positioned to capitalize on the growing demand for mobile data and prepare for the next phase of growth in the Indian telecom sector.