Even though 16.36 billion additional Vodafone Idea (Vi) shares were issued through the follow-on public offering (FPO) and flooded the market on Thursday, the company’s shares recovered their early losses and increased by about 6%. On the BSE, the stock finished at Rs 13.89 per share, more than 26% above the FPO price of Rs 11.
Bids were received for 6.4 times the amount of shares that were offered in the company’s Rs 18,000-crore FPO, the biggest secondary share sale in Indian history.
The fundraise represents a “fresh lease of life,” according to Kumar Mangalam Birla, chairman of Aditya Birla Group, who dubbed it the start of Vi 2.0.
We are encouraged by the strong participation from both domestic and international investors. In particular, considering the size of the offer, the retail portion’s entire subscription is really impressive,” Birla stated on Thursday during the FPO share bell ringing ceremony.
Although there have been many events and milestones in the 17 years since Idea Cellular’s listing, Birla noted that the successful completion of the FPO is one of the major turning points for the telecom industry.
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Head of wealth at Swastika Investmart Shivani Nyati stated that with the company’s potential for turnaround, she does not anticipate the stock falling below Rs 11 even though the initial selling pressure was caused by investors seeking quick profits. In order to potentially profit from a future climb to Rs 18, aggressive investors with a long-term perspective might think about holding onto the stock, according to Nyati.
The average ticket size for ordinary investors was Rs 60,000, according to merchant bankers, and this FPO added about 0.9 million shares to Vodafone Idea.
On April 24, the average trading volume for a month was approximately 980 million shares of Vodafone Idea. On Thursday, more than 10.5 billion shares of the company were traded on the NSE and the BSE combined, almost 11 times higher.
Yet, a number of dealers and regular investors said that on the first day following the FPO listing, they encountered technical difficulties on the NSE when trading Vodafone Idea shares. A social media outcry over their inability to complete deals was heard from retail investors, who were granted 35% of the FPO shares, valued at Rs 6,300 crore.
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