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Business News/ Markets / Stock Markets/  Vodafone Idea share price jumps over 4% ahead of FPO

Vodafone Idea share price jumps over 4% ahead of FPO

Vodafone Idea share price rose over 4% ahead of its FPO launch. The company raised ₹5,400 crore in its FPO with support from anchor investors. Technical analysts suggest the stock is in a short-term consolidation phase with good support at ₹12–11.50.

Vodafone Idea share price today opened at an intraday low of ₹13.08 apiece on BSE.Premium
Vodafone Idea share price today opened at an intraday low of 13.08 apiece on BSE.

Vodafone Idea share price jumped over 4% prior to the launch of its follow-on public offer (FPO) today. On Tuesday, April 16, Vodafone Idea garnered around 5,400 crore through its follow-on public offering, which was backed by anchor investors such as GQG Partners, UBS Fund Management, Jupiter Fund Management, Fidelity Investments, and Australian Super. Vodafone Idea share price today opened at an intraday low of 13.08 apiece on BSE, the stock touched an intraday high of 13.48. 

According to technical analysts, Vodafone Idea stock is in a short-term consolidation phase. However, prices have good support in the range of 12–11.50, and hence the downside seems to be limited.

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Also Read: Vodafone Idea FPO opens today: GMP, price, other details. Should you apply?

The Vodafone Idea FPO subscription date is set to begin on today (Thursday, April 18) at 10:00 IST, and end on Monday, April 22. The price band for Vodafone Idea FPO has been fixed in the range of   10 to 11 apiece. Bids can be placed in multiples of 1,298 equity shares, with a minimum bid limit of 1,298 equity shares.

The Vodafone Idea FPO total offer size comprises of fresh issue of equity shares aggregating up to 18,000 crore.

Also Read: Vodafone Idea FPO opens today. Should you bid? Here's what GMP, experts say about the 18,000-crore issue

According to the red herring prospectus (RHP), the net proceeds from the new issue will be used by the company to finance the following: (i) acquisition of equipment for the expansion of its network infrastructure, amounting to 12,750 crore; this includes (a) the establishment of new 4G sites; (b) the augmentation of capacity at both existing and new 4G sites; and (c) the establishment of new 5G sites; (ii) payment of certain deferred payments for spectrum to the DoT and the GST thereon, amounting to 2,175 crore; and (v) the remaining amount for general corporate purposes.

Brokerage IIFL Securities recommended subscribing to the FPO and upgraded Vodafone Idea to ADD with a target price of 14.

The brokerage estimates that Vodafone Idea would get capital of 45,000 crore from the equity infusion . This should help Vodafone Idea close the gap with peers in 4G coverage and capacity. In addition to limiting subscriber losses, this would speed up the transition of 2G customers to 4G.

Also Read: Vodafone Idea raises 5,400 crore from anchor investors led by GQG

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.

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Published: 18 Apr 2024, 09:34 AM IST
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