Vodafone Idea FPO day 2: GMP, subscription status to review. Should you subscribe to this ₹18,000 crore issue?

According to BSE statistics, retail investors lone bid for 6% of the shares acceptable speech for them, portion the QIB quota had 61% subscriptions astatine the extremity of the time and the non-institutional capitalist class got 28% subscriptions.

Arun Kejriwal, laminitis of Kejriwal Research and Investment Services explained that QIBs should get subscribed to contiguous itself connected the 2nd day. This Saturday is simply a 3rd Saturday, which is simply a moving day, for the bank, and applications getting submitted connected Saturday mightiness get reflected connected Monday, and the retail information mightiness spot a abrupt spurt connected the 3rd day. If we spot the applications that person travel into retail and disagreement them by the magnitude received, we get an denotation that ample applications are coming successful for the retail portion. What I mean is radical applying conscionable nether 2 lacs. They are not going into the ample HNI category; they are going into retail.

"Today successful the morning, they could person immoderate effect due to the fact that of the geopolitical situation. The Nifty 50 is down sharply, and 1 does not cognize however markets volition react, including Vodafone Idea shares. Even today, you volition spot decent numbers coming successful overall. If QIB itself is subscribed by today, it sends a affirmative signal; QIBs ne'er get subscribed connected the 2nd day. This being a ample contented of ₹18,000 crore, if QIBs are subscribed connected time 2, the optics are precise high," added Kejriwal.

Vodafone Idea FPO details

Up to ₹18,000 crore worthy of freshly issued equity shares marque up the Vodafone Idea FPO's full connection size. The terms set for Vodafone Idea FPO has been fixed successful the scope of  ₹10 to ₹11 apiece. Bids tin beryllium submitted successful multiples of 1,298 equity shares, with a minimum bid bounds of 1,298 equity shares.

The nation's third-largest telecom relation plans to money the pursuing utilizing the nett proceeds of the caller issue, according the reddish herring prospectus (RHP): (i) spending ₹12,750 crore connected instrumentality to grow its web infrastructure; this includes (a) mounting up caller 4G sites, (b) expanding capableness astatine some caller and existing 4G sites, and (c) mounting up caller 5G sites; (ii) paying ₹2,175 crore to the DoT for definite deferred payments for spectrum and the GST thereon; and (v) utilizing the remaining funds for wide firm purposes.

Through its follow-on nationalist offering, Vodafone Idea raised astir ₹5,400 crore from anchor investors, which see Australian Super, GQG Partners, Fidelity Investments, UBS Fund Management, and Jupiter Fund Management.

Vodafone Idea FPO Review

Swastika Investmart Ltd

As per the brokerage, the main nonsubjective of this backing is to fortify the web infrastructure of Vodafone Idea. In bid to amended vie with Jio and Airtel, the 2 marketplace leaders, this involves the installation of caller 4G and 5G towers, which are indispensable for improving web sum and capacity. Furthermore, a information of the net volition beryllium utilized to wage down debt, which mightiness fortify Vodafone Idea's finances.

Nonetheless, prospective investors look difficulties owed to Vodafone Idea's fiscal circumstances. In opposition to its competitors, Vodafone Idea has consistently seen a alteration successful its subscriber base. In addition, determination mightiness beryllium a fiscal situation successful 2026 owed to ample spectrum and AGR (Adjusted Gross Revenue) obligations that could full up to $4 billion.

“Even with the alluring 15–17% discount provided by the FPO, VI doesn't look to person a wide way to betterment successful the adjacent future. Consequently, earlier taking portion successful the FPO, investors should cautiously analyse these concerns, particularly VI's fiscal lasting and imaginable liabilities," said the brokerage.

Geojit Financial Services Ltd 

According to the brokerage, the Indian government, which has a 32% involvement successful Vodafone Idea, volition yet get a 24% holding done a reverse banal offering (FPO). Offering a 14.7% discount from the erstwhile closing terms of Rs.12.9 (16 April 2024) astatine the precocious terms scope of ₹11, the contented is available.

Vodafone Idea presents a precocious hazard proposition successful the abbreviated to mean word fixed the near-term prospects of sustained losses and lawsuit attrition arsenic a effect of the deficiency of improvement of 4G services successful examination to its peers. Restructuring the indebtedness and expanding 4G and 5G services volition find the semipermanent picture. For investors that are considered precocious hazard owed to their beardown parental support, we firmly springiness the subscribe rating.

Vodafone Idea FPO GMP today 

Vodafone Idea FPO GMP oregon grey marketplace premium is ₹1.20. The caller shares being issued nether the FPO volition apt beryllium listed astatine ₹12.2, representing a summation of 10.91% implicit the precocious bounds of the terms band, according to investorgain.com.

The FPO GMP inclination shows nary important change, and is accordant with the erstwhile 7 sessions' grey marketplace activities. This signifier is expected to proceed until the last day. Grey marketplace premium indicates investors' readiness to wage much than the contented price.

'Grey marketplace premium' indicates investors' readiness to wage much than the contented price.

Disclaimer: The views and recommendations supra are those of idiosyncratic analysts, experts and broking companies, not of Mint. We counsel investors to cheque with certified experts earlier making immoderate concern decision.

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Published: 19 Apr 2024, 09:26 AM IST