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Vi FPO receives bids for 26%, 331.17cr shares of 1260cr

Vodafone Idea kicked off its Rs 18,000 crore FPO issue, including a fresh share sale of 16,363,636,363 equity shares for subscription on Thursday, April 18. The telco has raised Rs 5,400 crore from several institutional investors via an anchor book. The three-day bidding for the issue will conclude on Monday, April 22.

The FPO was subscribed 26 percent. The issue received bids for 331.17 crore shares out of 1,260 crore shares on offer.

On Day One,
Retail investors bought 6 percent of their allotted quota.

HNIs (non-institutional investors) have bought 28 percent of their allotted quota. They have bid for 74.89 crore shares against the reserved portion of 270 crore shares.

Qualified Institutional Buyers (QIBs) have picked 61 percent of their allotted quota as they bid for 217.94 crore shares against the 360 crore shares allotted to them.

While the market rewarded the telco, the stock rose more than 4.8 per cent to Rs 13.54 during the trading session on Thursday, the FPO is seeing a mixed response from the investors.

GQG Partners has been aggressive and come in as anchor investor putting in Rs 1,348 crore. The anchor book of Rs 5,700 crore is largely funded by various arms of foreign investors like Fidelity, Goldman Sachs, Morgan Stanley, Citigroup, UBS, Abu Dhabi Investment Authority and Society Generale.

Back home, the five domestic mutual funds placed small bets picking up 79.5 crore shares (which amount to Rs 874 crore) across 11 schemes. Citi Research and CLSA too echoed similar sentiments. “We remain on the sidelines for now given uncertainties on future repayments as well as equity dilution,” said Citi Research in a note. CLSA maintained a ‘sell’ rating, pegging its target price at Rs 5. “We expect Vi to bridge the network coverage gap on 4G and arrest some of the market share losses. However, the gap in 5G coverage (versus larger peers) would remain significant,” said Kotak in a note.

Prashanth Tapse, Mehta Equities; Amit Goel, co-founder and chief global strategist at Pace360; and Shivani Nyati, Swastika Investmart; Geojit Financial Services; too advised to stay away from the FPO. They assign the subscribe rating for high-risk investors on a long-term basis.

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CT Bureau

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