Vodafone Idea FPO: QIBs lift subscription to 13% on Day 1 so far; check latest GMP

The follow-on public providing (FPO) of Vodafone Concept noticed a combined response from the traders through the preliminary few hours of the primary day of the bidding course of. Bidding for the difficulty, which had kicked off for subscription on Thursday, April 18, was largely led by institutional bidders.

Telecom operator Voda Concept is promoting its shares within the worth band of Rs 10-11 apiece. Buyers can apply for no less than 1,298 shares and its multiples thereafter. The Rs 18,000 crore FPO subject features a contemporary share sale of 16,363,636,363 fairness shares, making it the biggest follow-on provide of the Indian markets.

In line with the info, the traders made bids for 1,65,57,70,336 fairness shares, or 13 per cent, in comparison with the 12,60,00,00,001 fairness shares provided for the subscription by 14.30 pm on Thursday, April 18. The three-day bidding for the difficulty will conclude on Monday, April 22.

The allocation for retail traders was subscribed solely 4 per cent, whereas the portion reserved for non-institutional traders noticed a subscription of merely 11 per cent. Nonetheless, the portion put aside for qualified-institutional bidders (QIBs) attracted bids for 30 per cent, as of the identical time.

Vodafone Concept, Integrated in March 1995, is a telecommunications participant, which gives voice, information, and value-added providers throughout 2G, 3G, and 4G applied sciences, resembling quick messaging and digital providers for enterprises and customers.

Shares of Vodafone Concept commanded a gray market premium of Rs 1.70 per share forward of itemizing, suggesting good points of round 15.45 per cent to the traders from the FPO worth. Nonetheless, the inventory rose greater than 4.8 per cent to Rs 13.54 through the buying and selling session on Thursday.

Brokerage corporations are largely constructive on the again of anticipated tariff hikes, development in common income per consumer (ARPU), capability enlargement and development discount plans. Analysts, monitoring the difficulty, imagine that the fundraising will assist the corporate in its monetary crunch. Nonetheless, they anticipate consumer base development and execution of revival plans might be key issues to be careful.

Vodafone Concept FO is a step in the appropriate route as it might assist the corporate to enhance its competitiveness within the close to duopoly Indian telecom market. The corporate’s focus to enhance its 4G penetration and launch 5G providers within the subsequent few quarters would improve the ARPU which is decrease than friends, mentioned Manish Chowdhury, Head of Analysis at StoxBox.

“We imagine that Vodafone Concept could be in a greater place to boost funds in future, each by fairness and debt, to service its obligations and development plan. The latest capital infusion by promoters and authorities’s efforts to maintain the corporate as a going concern instils confidence in regards to the turnaround prospects of the corporate,” he mentioned suggesting traders with average to high-risk urge for food to subscribe for a medium to long run perspective.

Vodafone Concept has reserved 50 per cent of the online provide for the certified institutional traders (QIBs), whereas non-institutional traders (NIIs) will get 15 per cent of shares. Retail traders will get 35 per cent of the online provide. The telecom operator has raised Rs 5,400 crore from a number of institutional traders through an anchor e book.

Contemplating the near-term dangers of continued losses, subscriber attrition because of lack of enlargement of 4G providers in comparison with its friends, VIL is a high-risk proposition within the quick to medium-term, mentioned Geojit Monetary Companies.

“The long-term outlook will rely on the restructure of the debt and enlargement in 4G & 5G choices. Given the robust parentage assist, we assign the subscribe score for top dangerous traders on a long-term foundation,” it mentioned.

Axis Capital, Jefferies India and SBI Capital Markets are the e book operating lead managers of the Vodafone FPO, whereas Hyperlink Intime India is the registrar for the difficulty. The FPO shares might be listed on the bourses, each BSE and NSE, on Thursday, April 25, 2024.