Shares of telecom operator Vodafone Idea today fell 5% to hit the day’s low at Rs 12.23 in today\’s trading session ahead of the closing of its Rs 18,000 crore follow on public offer (FPO).
Vodafone had launched a follow-on public offering on Thursday, 18th April to raise Rs 18,000 crore which received a strong response from anchor investors, including GQG Partners.
Vi has raised Rs 5,400 crore from 74 anchor investors, the firm said in a press statement on Wednesday. The investors include GQG Partners, The Master Trust Bank of Japan, UBS, Morgan Stanley Investment Management, Fidelity, Quant, Citigroup Global Markets, Australian Super, and Motilal Oswal.
The company allotted 490.9 crore shares to anchor investors at Rs 11 per share. Notably, the largest portion of shares, comprising 26% of the total allocation to anchor investors, was secured by GQG Partners, valued at Rs 1,345 crore. Fidelity Investments committed approximately Rs 772 crore to the FPO, while Troo Capital and Australian Super will also be investing Rs 331 crore and Rs 130 crore, respectively.
Approximately 16.2% of the total allocation amounting to Rs 874 crore to anchor investors was allocated to five domestic mutual funds, led by Motilal Oswal Midcap Fund, which invested Rs 500 crores.
\”The FPO will bring big funds and it will get oversubscribed. However, investors must not expect major listing gains and avoid taking a blind call. It\’s a loss-making company and can\’t see them being profitable in the next 12-18 months,\” said Avinash Gorakshakar of Profitmart Securities.
Even though the offer might be a step in the right direction and alleviate some of the company\’s concerns, it is difficult to say how long it will take for the company to show some profitability and reduce debt significantly. The telco hasn’t reported an annual profit since 2016.
VI is the third largest telco in India based on subscriber base. The company is raising funds for capex purposes of increasing its network infrastructure by expanding the capacity of the existing 4G sites and setting up new 4G and 5G infrastructure as well.
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