The Vodafone Idea Follow-On Public Offer (FPO) has acquired quite an important space in the stock market currently as anchor investors and institutional investors specifically, have shown tremendous interest in the offer. However, retail investors have more or less snubbed the issue. While 2 days have already passed, investors should know that there is just one more day left for them to invest in the offer as it will close on April 22 – it commenced on April 18, 2024. In case you are interested in knowing about how things are progressing and whether you should invest, then a look at the Vodafone Idea FPO GMP may offer some inkling going forward.

Know the Vodafone Idea FPO GMP and whether you should invest in the offer.(REUTERS)

Vodafone Idea FPO is worth 18,000 crore with top market participants picking up on the offer. As far as the Vodafone Idea FPO GMP, or grey market premium, is concerned then market analysts indicate that it stands at 1.40 per share. Significantly, this is 40 paise up on what the GMP was being quoted at the start of the FPO.

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Notably, Vodafone Idea FPO price band has been set at 10 to 11 and what is more, the share price on Friday closed at 12.85, a definite increase even over the upper end of the FPO price range.

Despite the overall downturn in the Indian secondary market, market analysts have noted the continued positivity in the Vodafone Idea FPO GMP even in the face of the prevailing sell-off pressure over the past week.

What investors must look at

And what should an investor do? Apply, or not?

“In the upcoming years, this struggling player may get back on track given the interest of major investors, fund houses, and the assistance of the Indian government. This means that at the given price, this is a purely long-term risky bet. Considering this, well-informed investors may allocate moderate funds for the long term and may add on post-listing at lower levels to average out the investment with a long-term investment strategy,” LiveMint quoted Amit Goel, Co-Founder and Chief Global Strategist at Pace 360 as saying.

Where the Vodafone Idea FPO stands now

* Almost 50% of the Vodafone Idea FPO has been subscribed

* Over 12,000 crore, including 5,400 crore by anchor investors (GQG and Fidelity picked up most of the shares), has been raised by the end of day 2

* Of the 1,260 crore shares on offer, 617.46 crore shares were subscribed on Friday

* QIBs picked up 93 per cent of the 360 crore shares reserved for them

* Non-institutional investors bought 75 per cent out of 270 crore shares earmarked for them.

* Retail investors piked up just 13 per cent of 630 crore shares earmarked for them:

How the company will spend the funds

* The company plans to allocate 12,750 crore of the total FPO proceeds towards network infrastructure expansion.

* This allocation will be used for setting up new 4G sites, expanding existing 4G sites, and establishing new 5G sites.

* Out of the 12,750 crore earmarked for network expansion, 5,720 crore will be specifically allocated to setting up the 5G network.

* Additionally, 2,175.31 crore will be allocated for making deferred payments for spectrum.

* The remaining FPO proceeds will be directed towards various general corporate purposes, including funding working capital requirements.

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