As per the media reports, Vodafone Idea is looking to raise around Rs 20,000 crore via Follow-on Public Offer (FPO) out of which the company is considering issuance of equity or convertible securities of Rs 2,075 crore on a preferential basis to one or more promoter group entities. The company is expected to infuse capital to finance its 5G rollout and to strengthen its 4G services.
For more details, you can check the news articles here (Mint, Moneycontrol, ET).
What is an FPO?
In an Initial Public Offering (IPO), a company offers its shares to the public for the first time. However, when an already listed company offers its shares to the public, the issue is called a Follow-on Public Offer (FPO).
What does Vodafone Idea Limited do?
Incorporated in 1995 as Birla Communications Limited, Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership-based mobile network operating company and is India’s 3rd largest telecom service provider. The Company provides pan India voice and data services across 2G, 3G and 4G, LTE Advanced, VoLTE, and VoWiFi.
For the quarter ended December 31, 2023, the company’s applicable gross revenue (ApGR) market share was 17.79% of the Indian mobile telecommunications services industry (as derived from TRAI Financial Data for the quarter ended December 31, 2023). The company had over 22.3 crore subscribers and a subscriber market share of 19.3% (Source: TRAI Subscription Report dated December 31, 2023).
They have an aggregate of 8,005.2 MHz of spectrum holdings across different frequency bands, of which 7,975.2 MHz spectrum is liberalized and can be used towards deployment of any technology (2G, 3G, 4G, or 5G). This includes the mid-band 5G spectrum (3300 MHz band) in 17 priority service areas and the mmWave 5G spectrum (26 GHz band) in 16 service areas.
Financials of Vodafone Idea Limited FPO (₹ crores)
| Financial Year | Total Assets | Total Revenue | Profit After Tax | EPS |
|---|---|---|---|---|
| March 31, 2021 | 203,480.60 | 42,126.40 | (44,233.10) | (16.11) |
| March 31, 2022 | 194,029.10 | 38,644.90 | (28,245.40) | (9.82) |
| March 31, 2023 | 207,242.70 | 42,488.50 | (29,301.10) | (8.43) |
| December 31, 2023 | 190,801.80 | 32,125.60 | (23,563.80) | (4.84) |
Schedule/Timeline of Vodafone Idea Limited FPO
| Issue Period | 18th April to 22th April 2024 |
|---|---|
| Deadline for accepting UPI mandate | Until 5 PM on the issue closing day |
| Finalization of Allotment | April 23, 2024 |
| Initiation of Refunds | April 24, 2024 |
| Credit of Shares | April 24, 2024 |
| Date of Listing | April 25, 2024 |
| Mandate end date | May 07, 2024 |
| Anchor Investors Lock-In End Date (50% of the investment) | May 23, 2024 |
Anchor Investors Lock-In End Date (Remaining investment) July 23, 2024
Note: Given that the above schedule is tentative, it should be noted that the anchor lock-in period ends 30 days after the actual allotment date for 50% of the shares, and 90 days after for the remaining portion.
Risk factors to consider:
Higher Capex and working capital requirement: The Company operates in a capital-intensive sector and requires significant capital to fund its operations and if they are unable to raise additional capital, its business, results of operations, financial condition, and cash flows could be adversely affected.
Highly indebted company: The company has incurred significant indebtedness of nearly 2.018 lakh crores and has not complied with certain covenants under its financing agreements. Any inability to meet its obligations, including financial and other covenants, under its debt financing arrangements could adversely affect the business, results of operations, financial condition and cash flows. The company also has major pending litigations.
How do I apply to the Vodafone Idea FPO?
You can apply for the Vodafone Idea FPO using any supported UPI app by following two steps:
- Enter your bid on Kite
- Accept the UPI mandate on your phone
On acceptance of the mandate, the bid amount will get blocked in your bank account. Click here to learn more.
Where do I check the allotment status for Vodafone Idea FPO?
You can check the allotment status for the Vodafone Idea FPO on the website of the Registrar and Transfer agent.
Alternatively, you can also check the allotment status on the NSE website.