Vodafone Idea FPO: As the telecom operator’s follow-up public offer kicked off on Thursday, its shares climbed 4 per cent. Investors can subscribe to the company’s FPO till Monday, April 22.
Vodafone Idea FPO: Finance Secretary says govt has supported the telecom operator
Vodafone Idea FPO: Finance Secretary, Dr TV Somanathan, said that the government, through its support to Vodafone Idea (Vi), is preserving competition in the country.
Somanathan told Business Today TV, “The government has supported Vodafone Idea’s FPO. Preserving competition is a major policy goal of the government.”
As the telecom operator’s follow-up public offer kicked off on Thursday, its shares climbed 4 per cent. Investors can subscribe to the company’s FPO till Monday, April 22. Vodafone Idea is selling its shares in the price band of Rs 10-11 apiece, and the lot size is set at 1,298 equity shares.
Analysts believe that the largest ever follow-on offer will help Vi amid its financial crunch, even as growth in user base and execution of revival plans would be the key things to watch.
Vi had over 22.3 crore subscribers and a market share of 19.3 per cent on December 31, 2023. The company offers mobile and fixed services to over 30 crore customers in across 17 countries.
According to Canara Bank Securities, the competitive landscape poses a potential threat to Vodafone’s market share and penetration in the future. “From a valuation perspective, Vi’s EV/EBITDA ratio for FY2023 stands at 18 times, above the industry average of approximately 15-16 times for the same period. We recommend Vi for the long-term considering their capacity expansion strategy, giving potential for ARPU expansion,” it said.
As per Kotak Institutional Equities, the FPO could help bridge the network coverage gap and improve the company’s competitiveness against its peers. It does not expect Vi to gain any meaningful market share from peers. “Potentially, the GoI could own an 80 per cent-plus stake in Vodafone Idea on a fully diluted basis in the worst case, which would limit any meaningful upside for Vi’s minority investors,” the broking firm said.
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