Make Your VODAFONE IDEA FPO

Make Your VODAFONE IDEA FPO: KNOW KEY DIFFERENCES BETWEEN FPO AND IPO AS INDIA’S LARGEST FOLLOW-ON PUBLIC OFFER OPENS ON APRIL 18.

1. Vodafone Idea is set to launch its follow-on public offer (FPO) worth ₹18,000 crore on April 18. The FPO, a fresh issue of 1,636.36 crore shares, closes on April 22.

2. Debt-laden Vodafone Idea is launching an FPO to raise funds as part of its ₹20,000 crore proposal. The FPO price band is set between ₹10 to ₹11 per unit.

3. Vodafone Idea's FPO will have 50% for QIBs, 15% for NIIs, and 35% for retail buyers. The company has already raised ₹2,000 crore through preferential equity issuance to promoters.

Stay informed about the Vodafone Idea FPO allotment date and listing on the BSE and NSE. Find out how this move will position the company in the competitive telecom market.

Vodafone Idea is planning to use the money raised from its FPO to expand its network infrastructure, setting up new 4G sites, enhancing the capacity of existing 4G sites, and deploying new 5G sites. In 2018, Vodafone India and Idea Cellular merged their businesses to create India's biggest telco with over 400 million customers. Interestingly, Idea Cellular had launched its IPO 16 years ago, in February 2007. Now, the merged entity, Vodafone Idea Ltd, is coming up with India's largest FPO worth ₹18,000 crore. If the subscription is successful, it could be the largest FPO ever in India. Previously, the largest FPO was worth ₹15,000 crore by Yes Bank in 2020.

Vodafone Idea is expected to utilize the net proceeds from the FPO to purchase equipment for expanding network infrastructure, set up new 4G sites, enhance the capacity of existing 4G sites, and deploy new 5G sites. Vodafone India and Kumar Mangalam Birla-led Idea Cellular merged their businesses to create India's biggest telco with over 400 million customers in 2018. Idea Cellular, an Aditya Birla Group company, launched its IPO 16 years ago, in February 2007.

Now, 16 years later, the merged entity, Vodafone Idea Ltd, is coming up with India's largest FPO worth ₹18,000 crore. The follow-on public offer could be the largest FPO so far in India after a successful subscription. The last biggest FPO was worth ₹15,000 crore by Yes Bank in 2020.

Vodafone Idea is planning to use the money raised from its FPO to expand its network infrastructure, setting up new 4G sites, enhancing the capacity of existing 4G sites, and deploying new 5G sites. In 2018, Vodafone India and Idea Cellular merged their businesses to create India's biggest telecom company with over 400 million customers. Interestingly, Idea Cellular had launched its IPO 16 years ago, in February 2007. Now, the merged entity, Vodafone Idea Ltd, is coming up with India's largest FPO worth ₹18,000 crore. If the subscription is successful, it could be the largest FPO ever in India. Previously, the largest FPO was worth ₹15,000 crore by Yes Bank in 2020.

What is the difference between an IPO and an FPO?

The main difference between an IPO and an FPO is that an IPO is the first time a company issues its shares to the public and lists them on a stock exchange, while an FPO is when a listed company issues additional shares to the public to generate more capital for expansion and other purposes. An IPO is launched when a company first starts selling its shares, while an FPO is launched at a later stage to generate additional capital through equity.

"Here’s how FPO works companies generally float FPOs to raise additional funds for expansion or debt settlement. This can be done through two routes. In the first case, the company issues an additional number of shares for the public while the value of the company remains the same. This is known as dilutive FPO. As the number of shares goes up the price of each equity share comes down and hence the earnings per share (EPS) could drop. In the second method, the large shareholders of the company may like to divest their stake by offering to sell a portion of their privately held equity in the open market. In this case, generally, directors or promoters of the company offer more shares for sale. The company’s total number of shares available remains same and thus the valuation does not get affected."

Where Is The Best OPPORTUNITY FOR INVESTORS IN IPO AND FPO?

As an investor, you have the opportunity to take part in the bidding of both IPOs and FPOs. If you are successful in your bid and are allocated shares, you will become a part-owner of the company. It is worth noting that many companies also reserve a portion of the public issue for their employees, providing benefits such as profit sharing. When it comes to investing, FPOs may be less risky than IPOs. By investing in an IPO, you purchase a stake in a private company, and the future performance of the stock after it becomes listed is unknown. However, with FPOs, you apply for shares of a company that is already listed. In this case, the share price trend, company fundamentals, and prospects can help you make an informed decision. FPOs also present a good opportunity to increase your stake in a company with strong growth prospects or a track record of robust performance.