Vodafone Idea FPO: Everything you should know about it

Vodafone Idea’s Follow-On Public Offer (FPO) commenced on April 18, 2024, and will continue until April 22, 2024, extending till the following Monday.

Investors have only one day left to apply for the Vodafone Idea FPO. Following two days of bidding for the ₹18,000 crore follow-on issue, the subscription status indicates significant interest in the primary market. Market analysts note that the Vodafone Idea FPO is trading at a premium of ₹1.40 per share in the grey market today.

The price range for the Vodafone Idea FPO has been set between ₹10 and ₹11 per share. Vodafone Idea’s closing share price on Friday was ₹12.85 each, exceeding the upper limit of the FPO price band by ₹1.85.

According to market watchers, the grey market premium (GMP) for the Vodafone Idea FPO stands at ₹1.40 today, marking an increase of ₹0.40 compared to its GMP at the start of the bidding period. Analysts noted the resilience of the Vodafone Idea FPO’s GMP amid a downturn in the secondary market, commending its performance.

They mentioned that the Indian stock market has endured sell-off pressure throughout the past week. Therefore, the fact that the Vodafone Idea FPO’s GMP is trading at a premium of 13 percent above the upper price band is commendable.

Following two days of bidding, the follow-on issue was subscribed 0.49 times overall, with the retail portion of the Vodafone Idea FPO being subscribed 0.13 times. The NII portion of the Vodafone Idea FPO was subscribed 0.75 times, while the QIB segment of the FPO was subscribed 0.93 times.

Therefore, with this ₹18,000 crore Vodafone Idea FPO still having over 500 percent availability, the likelihood of securing Vodafone Idea shares during the allotment process is quite promising. Consequently, deciding whether to apply for the issue becomes a tricky decision.

Regarding whether to apply for the Vodafone Idea FPO or not, Amit Goel, Co-Founder and Chief Global Strategist at Pace 360, commented, “Vodafone Idea FPO is the third-largest player in telecommunication services and has shown inconsistency in its performance so far against two mega players, namely Jio and Bharti. It is coming with an FPO worth Rs. 18,000 crore at a price range of ₹10–11 apiece, following a Rights Issue worth Rs. 25,000 crore in April 2019. However, on the financial front, it has been posting losses at the net levels. In the upcoming years, this struggling player may get back on track given the interest of major investors, fund houses, and the assistance of the Indian government. This means that at the given price, this is a purely long-term risky bet. Considering this, well-informed investors may allocate moderate funds for the long term and may add on post-listing at lower levels to average out the investment with a long-term investment strategy.”