The ₹18,000-crore further public offer (FPO) of Vodafone Idea opens today for public subscription The FPO will close on April 22. The price band has been set at ₹10-11. This is the largest-ever fund raising through FPO in India so far.

Prior to this, the largest FPO was a ₹15,000 crore share-sale by YES Bank in 2020. Though Adani Enterprises’ ₹20,000-crore FPO last year was the largest ever, the company had cancelled the issue despite successful fund raising and refunded the proceeds it had received as part of its FPO, to investors. It had then said, “given the unprecedented situation and the current market volatility, the company aims to protect the interest of its investing community by returning the FPO proceeds, and withdraws the completed transaction.”

Issue details

Vi will issue 1,636 crore shares and the market lot is 1,298 shares.

The company has reserved 50 per cent of the FPO for Qualified Institutional Buyers (QIB), 15 per cent for Non-Institutional Investors (NII) and the remaining 35 per cent for retail investors.

Utility of funds

The telecom major proposes to utilise net proceeds from fresh issue of equity shares towards purchase of equipment for the expansion of its network infrastructure amounting to ₹12,750 crore; expanding the capacity of existing 4G sites and new 4G sites and setting up new 5G sites; Payment of certain deferred payments for spectrum to the DoT and the GST thereon amounting to ₹2,175 crore and balance amount for general corporate purposes.

Anchor investors

As part of fundraising, the Vi raised ₹5,400 crore from anchor investors from marquee global as well as domestic investors who included GQG Partners Emerging Markets Equity Fund, Fidelity, UBS Fund Management, Abu Dhabi Investment Authority, Australian Super, Troo Capital, Morgan Stanley, Citigroup Global Markets Mauritius and Jupiter Fund Management.

Vi has allotted 490.9 crore shares to 74 funds at ₹11 apiece, which is also the upper end of the price band. This translated into a transaction size to ₹5,400 crore.

Of the total allocation to anchor investors, 79.52 crore stocks, or 16.2 per cent of the total, were allocated to five domestic mutual fund through a total of 11 schemes including Motilal Oswal Mutual Fund, HDFC Mutual Fund, SBI General Insurance and Quant Mutual Fund, were allocated shares in the anchor round.

Axis Capital, Jefferies India and SBI Capital Markets are the book-running lead managers of the Vodafone Idea FPO and Link Intime India Private Ltd is the Vodafone Idea FPO registrar.