Vodafone Idea FPO: Shares To Launch Tomorrow; Premium Listing Hinted at by GMP; 9% Drop in Shares
The shares that were allocated in Vodafone Idea’s follow-on public offer (FPO) are scheduled to debut on the stock exchanges tomorrow. Vodafone Idea is a telecom behemoth. With the Vodafone Idea FPO shares set to launch at the higher end of the Rs 10-11 price range, at Rs 11 a share, investors are waiting to see whether the shares will trade at a premium or a discount.
This event’s conclusion comes after Vodafone Idea Ltd.’s successful fundraising campaign, which saw the company raise a significant sum of money from institutional investors totaling Rs 18,000 crore. Thanks to this financial achievement, it’s the biggest FPO that India’s capital markets have ever seen.
Shareholders will have their accounts credited with the allocated shares of Vodafone Idea FPO today, Wednesday, April 24, after the distribution of shares to investors on Tuesday, April 23. In the meanwhile, the refund process for investors who were not able to get shares is starting today.
The third-biggest cellular carrier in India, Vodafone Idea, began accepting new customers on Thursday, April 18, and ended its service on Monday, April 22. The business intends to use the funds from the FPO to support its network infrastructure, with Rs 12,750 crore set aside for new 4G site establishment, capacity expansion at current 4G sites, and investments in the development of new 5G sites. The remaining monies will also be used to support other strategic company objectives and working capital needs.
Prior to its historic FPO, Vodafone Idea raised almost Rs 5,400 crore from anchor investors, including well-known companies like UBS Fund Management, GQG Partners, Australian Super, Jupiter Fund Management, and Fidelity Investments.
However, Vodafone Idea’s share price took a hit during Wednesday’s trading session despite the excitement around its market debut, finishing 9.24% down at Rs 13.06 each on the Bombay Stock Exchange (BSE).
The grey market premium (GMP) for Vodafone Idea FPO is estimated by analysts following the gray market dynamics to be Rs 1.75. This suggests that investors are feeling optimistic. It is anticipated that the new shares issued under the FPO would probably open at Rs 12.75, which would represent a significant gain of 15.91% above the top bound of the price range.
The IPO GMP trajectory is trending higher, indicating that Vodafone Idea’s shares will be listed favorably. Analysts at investorgain.com estimate a GMP range of Rs 0 to Rs 2, reflecting investors’ willingness to pay more than the issue price, based on insights from the last 13 grey market sessions.
The ‘gray market premium’ is a measure of investors’ willingness and confidence in a certain stock and often predicts how well it will do in the main market. With the telecom giant Vodafone Idea preparing for its market debut tomorrow, all eyes are on how its shares will perform against the background of elevated market expectations.
