Vodafone Idea may enter MSCI index, likely to bring $275-$280 million inflows

Vodafone Idea FPO, Vodafone Idea share price: Vodafone Idea, which seems to have gotten a new lease of life with its Rs 18,000 crore follow-on public (FPO), India's biggest so far, may enter the MSCI index in August 2024. As per reports, if the price remains supportive, the stock may enter the index. The supportive price is seen around Rs 12. If included, it could bring inflows in the range of $275 to $280 million.

Vodafone Idea's FPO closed for bidding on Monday (April 22). The window for the FPO application was open from April 18 to April 22, and its allotment status is likely to be revealed today (April 23). The offer was subscribed 6.99 times as of 5:27 pm on Monday, April 22, 2024. Category-wise, the retail portion was subscribed 1.01 times, while the QIB category saw a subscription of 19.31 times. The NII portion was subscribed 4.54 times.

The company planned to raise Rs 20,000 crore through equity, and this FPO was part of it. Now, the company will easily be able to raise Rs 25,000 crore via debt. The capital will be utilised for 4G coverage, 5G rollout, and capacity expansion. The management aims to start 5G services in some places after six to nine months of the issue and to provide 5G services to subscribers (40 per cent of revenue) in the next 24 to 30 months.

The FPO received a total bid, including anchor investors, of Rs 94,000 crore, with more than 11.6 lakh applications.

Telecom operator Vodafone Idea's (VIL) board has fixed the FPO offer price at Rs 11 per equity share, according to a regulatory filing. The anchor investor offer price of Rs 11 per equity share has also been greenlit by the board. "... Following resolutions were also passed... Determined and approved the offer price of Rs 11 per equity share... Approved the anchor investor offer price of Rs 11 per equity share," VIL informed. 

The fundraising will arm VIL with ammo to improve its competitive positioning in the Indian telecom market, where it trails Reliance Jio and Bharti Airtel, by a wide margin.

"Further to our letter dated April 17, 2024, intimating you about the meeting of the board of directors of the company to be held on April 22, 2024, in respect of the offer, we wish to inform you that the Board, at its meeting held today, April 22, 2024, has approved and adopted the prospectus dated April 22, 2024, in connection with the offer," VIL said.

The prospectus has been filed with the Registrar of Companies, Gujarat, at Ahmedabad, and submitted to the Securities and Exchange Board of India, BSE Limited, and National Stock Exchange of India Limited, it added.

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