Vodafone Idea FPO shares debut on bourses; Kumar Mangalam Birla says it is the beginning of Voda-Idea 2.0

Vodafone Idea FPO: Kumar Mangalam Birla, the chairman of Aditya Birla Group, said on Thursday, April 25, that a strong response to Vodafone Idea's Rs 18,000 crore follow-on public offer (FPO), India's biggest so far, has paved the way for Voda-Idea 2.0. The FPO shares got listed today.

Birla, in his address to the media on the sidelines of the FPO shares listing ceremony, thanked the government for supporting the share sale. The FPO, which ran between April 18 and April 22, was subscribed nearly seven times. Both domestic and foreign investors participated in the FPO. Birla added that Voda Idea is not only a company but India's asset too. The funds raised will be used for network expansion and technology. 

The company, via its FPO, overall collected Rs 94,000 crore worth of bids that included anchor investors. The number of applications it received was more than 11.6 lakh. Before the FPO, the company's listed number of shares was 5,012 crore. Today, 1,636 crore new shares were listed. Hence, the total outstanding shares of the company after its FPO stand at 6,648 crore.

Shares eventually ended at Rs 13.78 apiece on the BSE, up 5.27 per cent. It hit a low of Rs 12 in the opening deals. 

Commenting on the FPO shares listing, Shivani Nyati, Head of Wealth at Swastika Investmart Ltd, said, "While Vodafone Idea's FPO listing around Rs 12 is a modest increase from the issue price, it reflects initial selling pressure for short-term gains."

However, a drop below Rs 11 seems unlikely given the company's turnaround potential. Positive signs and potential post-election tariff hikes could trigger fresh buying after this initial volatility. Aggressive investors with a long-term view might consider holding onto the stock, aiming for a potential rise towards Rs. 18 in the future, Nyati added.

Aditya Birla Group Chairman Kumar Mangalam Birla added that the FPO is a "fresh lease of life" for the telco. "The company, which has been struggling to hold on to subscribers amid intense competition in the sector, will focus on increasing its network and selectively introduce 5G services," Birla told reporters.

When asked if most of the problems for the company would get sorted out with the capital raise, Birla answered in the affirmative. "And this is like a sort of fresh lease of life for the company," he said. Birla declined to comment on the reports of a stake sale in Indus Towers.

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Source: Zee Business Research

With inputs from Zee Business Research and PTI