To raise capital, the third major telecom firm in India will be introducing a follow-on public offer (FPO) next week. Now, those who are looking to purchase this offering are surely keen to know all the necessary details which are required to know along with the launch date. According to multiple reports, Vodafone Idea is looking to accumulate Rs 20,000 crore through FPO. The news was officially shared by Vodafone Care on Thursday, 11 April 2024 who said that the company is planning to raise money through FPO of equity shares.
Vodafone Idea’s board proceeded with a resolution approving, adopting and filling out the red herring prospectus (RHP) with the Registrar of Companies, Gujarat in connection with the FPO dated April 11, 2024. In the meantime, Vodafone Idea’s shares stood trading 2.86% lower at Rs 12.56 in early deals of Friday’s trading session. It is worth noting that the shares of Vodafone Idea were closed at the price of Rs 12.93 on Wednesday’s session on BSE. The market valuation of the telecom company stood at Rs 61,044.49 crore. A total of 121.1 lakh shares were traded on the BSE, resulting in a turnover of Rs 15.35 crore.
When Will Vodafone Idea’s FPO Open?
As per the telco, the FPO of Vodafone Idea will begin on Thursday, 18 April 2024 and it will shut down on Monday, 22 April 2024. Moreover, the anchor investor offers will get approval on Tuesday, 16 April 2024, as mentioned in an exchange filing. In addition to this, the board of the firm also shares the floor price of the offer to be Rs 10 per equity share. The Capital Raising Committee of the telecom also gave the approval on the cap price of the offer to be Rs 11 per equity share. A minimum bid lot of 1,298 equity shares and multiples of 1,298 equity shares will be available for purchase.
As stated by the company, a meeting of the Capital Raising Committee took place on Friday, 12 April 2024 to consider and approve, amongst other things, the price band and discount. The price of Rs 11 represents a 26% discount from the recently approved preferential issue price to the promoter entity at Rs 14.87 and a 15% discount from the last closing price of Rs 12.95.
Vodafone Idea’s Share
As mentioned above, the shares of the telecom firm were edging lower at the time of intraday trade on Wednesday, 10 April 2024. However, after the report of FPO came out, there was a surge witnessed today in comparison to the previous day’s trading session. At present, the share price of Vodafone witnessed a rise of 1.54% at Rs 13.15 on NSE. Apart from that, India’s third largest telecom company will likely participate in road shows along with the interaction with analysts and investors beginning from April 15 till the closing of the offer.
It is worth noting that over the last few years, the stock price of Vodafone Idea doubled in value. The firm recently passed a preferential share issue to accumulate Rs 2,075 core from an Aditya Birla Group (ABG) entity, creating a space for a broader funding program needed for the financial recovery of the company.
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What Is FPO and Why Is It Issued?
A follow-on public offer (FPO) is the distribution of shares to investors by a company listed on a stock exchange. A firm generally issued an FPO to raise “additional capital” for numerous reasons. This goal is achieved by conducting a dilutive FPO where new shares are offered and new money is generated. Apart from issuing FPO, Vodafone Idea is also in discussion with numerous banks to tie up debt funding to raise a fund of Rs 45,000 crore in a combined form of equity and debt.