Vodafone Idea Ltd. FPO: Review, Valuation, Opening Date & GMP

Vodafone Idea Limited FPO  - Complete Overview

Established in 1995, Vodafone Idea Limited stands as the third largest telecommunications service provider in India. The company offers a range of services including voice, data, enterprise, and value-added services like short messaging services and digital services, spanning across 2G, 3G, and 4G technologies.

As of December 31, 2023, Vodafone Idea boasted over 223.0 million subscribers and held a subscriber market share of 19.3%. Additionally, in the quarter ending December 31, 2023, the company facilitated approximately 401 billion voice minutes and around 6,004 billion MB of data on its network.

On a broader scale, the Vodafone group extends its mobile and fixed services to over 300 million customers across 17 countries, and it collaborates with mobile networks in 45 other countries. The group also boasts one of the world’s largest Internet of Things (“IoT”) platforms.

Vodafone Idea's infrastructure is robust, with approximately 183,400 unique tower locations and over 438,900 broadband (3G and 4G) sites, all of which are VoLTE-enabled. 

The company's population coverage surpasses 1.2 billion individuals, and its Optical Fiber Cable (OFC) network spans over 298,000 kilometres, inclusive of its own infrastructure and indefeasible rights of use (“IRU”) acquired (excluding overlaps).

Moreover, the company's mobile network reaches communities in over 487,000 towns and villages in India, with broadband services available in more than 342,200 towns and villages, as of December 31, 2023.

The total income of the company for the Financial Year 2023 and the nine months ending December 31, 2023, stood at Rs.424,885 million and Rs.321,256 million, respectively.

Vodafone Idea Limited FPO Overview

Vodafone Idea Limited FPO date is slated to be open for subscription from April 18, 2024, to April 22, 2024. This BSE, NSE FPO follows a Book Built Issue FPO.

Vodafone Idea Limited's FPO price is fixed in the range of Rs.10 to Rs.11 per share. 

The total issue size of this FPO amounts to Rs.18,000.00 Cr. The company has allocated shares 35% to retail investors, 50% to institutional and 15% to non-institutional investors.

 

Company Financial

Compared to the financial year ending March 31, 2023, and March 31, 2022, Vodafone Idea Limited has seen growth in total assets and total revenue but a decrease in net worth. The profit after tax has decreased while the total borrowing increased.

(Amount in Crore)

Period	31 Dec 2023	31 Mar 2023	31 Mar 2022
Total Assets	190,801.80	207,242.70	194,029.10
Total Revenue	32,125.60	42,488.50	38,644.90
PAT	-23,563.80	-29,301.10	-28,245.40
Net worth	-97,931.90	-74,359.10	-61,964.80
Reserve & Surplus	-146,611.60	-123,038.80	-94,083.60
Total Borrowings	203,425.70	201,586.00	190,917.70

The Objective of the Issue

The Company proposes to utilise the Net Proceeds to fulfil the following objectives: 

1. Purchase of equipment for the expansion of our network infrastructure by: (a) setting up new 4G sites; (b) expanding the capacity of existing 4G Sites and new 4G sites; and (c) setting up new 5G sites

2. Payment of deferred payments for spectrum to the DoT and the GST thereon

3. General corporate purposes

Peers of Vodafone Idea Limited FPO

Name of the Company	Face Value (Rs)	EPS (Rs)	P/E Ratio
Vodafone Idea Limited	10	(8.43)	NA
Bharti Airtel Limited	5	14.57	84.37
Bharti Hexacom Limited	5	10.98	51.91$
Reliance Jio Infocomm Limited	10	1.07	NA^

 

 

 

Evaluation

The IPO is priced within the range of Rs.10 to Rs.11 per share.

Evaluation of P/E Ratio

• Considering the FY23 EPS of Rs - 8.43 from the last year, the resulting P/E ratio is - 1.30x.

• Taking into account the weighted EPS of Rs - 10.06 for the last three years, the P/E ratio amounts to - 1.09x.

Comparative Analysis with Listed Peers

• The industry's average P/E is 68.14x.

As a result, the FPO price range, with a P/E ratio ranging from - 1.30x to - 1.09x, seems neutrally priced to the industry average of 68.14x.

 

FPO's Strengths 

• Substantial subscriber base

• Expansive telecommunications network

• Established network structured on 5G-ready architecture

• Broad enterprise customer base with enduring relationships

• Vast distribution and service network

• Respected brand with a compelling proposition

• Firm promoter backing

• Seasoned management team
  
  

FPO weaknesses 

• The Company has accumulated significant indebtedness and has failed to meet certain covenants outlined in its financing agreements.

• The telecommunication licenses and spectrum allocations of the company are subject to terms and conditions, ongoing review, and varying interpretations, which may lead to modifications, suspension, early termination, or additional payments.

• Non-payment of substantial dues to the company's vendors.

• Intense competition faced by the company, which could impact its market share and profitability.

• Outstanding legal proceedings involving the Company, certain subsidiaries, promoters, directors, and group companies.

• Aditya Birla Idea Payments Bank Limited, a Group Company and Associate of the Company, is presently undergoing liquidation.

• The company has incurred losses in recent periods and may not achieve or sustain profitability in the future.

• Any further downgrade in the company's credit ratings could escalate its borrowing costs, impede its ability to secure financing, and negatively impact its business, financial results, and overall financial condition.

• The Supreme Court of India has issued a judgment granting the Company and other Telecom Service Providers 10 years to settle the AGR dues in yearly instalments.
  
  

 

 

FPO GMP Today

The Latest GMP of Vodafone Idea Limited is Rs. 1.40.

 

Vodafone Idea Limited FPO timetable (Tentative)

Vodafone Idea Limited FPO is scheduled from April 18 to April 22, 2024, with allotment on April 23, refund initiation on April 24, and listing on April 25, 2024.

Events	Date
IPO Opening Date	April 18, 2024
IPO Closing Date	April 22, 2024
IPO Allotment Date	April 23, 2024
Refund initiation	April 24, 2024
IPO Listing Date	April 25, 2024

Vodafone Idea Limited FPO Details 

Vodafone Idea Limited FPO, with a face value of Rs.10 per share, opens on April 18 and closes on April 22, 2024, offering 16,363,636,363 shares at Rs.10 to Rs.11 per share, with a lot size of 1298 shares, aiming to raise Rs.18,000.00 Cr, and will be listed on NSE, BSE.

IPO opening & closing date	April 18, 2024 to April 22, 2024
Face value	Rs. 10 per share
Issue Price	Rs. 10 to Rs. 11 per share
Lot Size	1298 Shares
Price of 1 lot	Rs. 14,278
Issue Size	16,363,636,363 shares (aggregating up to Rs.18,000.00 Cr)
Fresh issue	16,363,636,363 shares (aggregating up to Rs.18,000.00 Cr)
Listing at	BSE, NSE
Issue Type	Book Built Issue FPO
Registrar	Link Intime India Private Ltd

 

 

 

Vodafone Idea Limited FPO Lot Details 

For Vodafone Idea Limited FPO, the retail investor can bid a minimum of 1 lot (1298 shares) at Rs.14,278 and a maximum of 14 lots (18172 shares) at Rs.199,892 while for HNI investors, the minimum investment is 15 lots (19,470 shares) at Rs.214,170.

Minimum Lot Investment (Retail)	1 lot
Maximum Lot Investment (Retail)	14 lots
Minimum Lot Investment (HNI)	15 lots
Maximum Lot Investment (HNI)	70 lots

 

Vodafone Idea Limited FPO Reservation

Institutional share Portion	50%
Non-institutional share Portion	15%
Retail share Portion	35%

 

Vodafone Idea Limited FPO Lead Managers

• Axis Capital Limited

• Jefferies India Private Limited 

• SBI Capital Markets Limited 
  
  

Dividend Policy

The Company has not declared or paid any dividends in the last three fiscal years, and the future payment of dividends is contingent upon the financial performance of the company.

 

 

Conclusion

The Vi FPO has received a strong endorsement from Bharti Hexacom. However, the issue size of the FPO is considerable, leading to suspicions regarding market reaction. The company is currently experiencing losses and may face potential bankruptcy in the future. Despite this, investors are making concerted efforts to revive the shares. Seasoned investors are advised to apply for the upcoming FPO after thoroughly evaluating all factors for optimal outcomes.

 

Want to start Your Journey in stock market trading and investment? Join our Stock Market Class to become beginner to expert trader! We cover everything from the basics of trading to advanced strategies for picking stocks. Plus, we're offering a special discount for women and students. Don't miss out - enroll now and kickstart your path to success in the stock market!

Open a world of Stock Market by Opening a Demat Account with your favourite Broking firm & Get a trading Strategy worth Rs.15,000!

• AngelOne
• Zerodha
• Upstox
• Alice Blue

Finowings IPO Analysis

Hope you enjoyed the Finowings IPO Analysis. We tried our best to give every required detail about the company that you should know before applying to the IPO. 

You must consult your financial advisor before making any financial decisions. 

To Apply for the IPO, Click Here.

 

To Read the Prospectus of the Company Click Here to Download the RHP.

 

 

Thank You for reading this blog.
Hope you loved the IPO analysis.
Please Comment Below with your feedback because Your feedback motivates us to deliver more such content.

 

Follow MUKUL AGRAWAL for the latest IPO news and reviews. You can connect with us on social media platforms like Twitter, Facebook, and Instagram. You can also subscribe to our YouTube Channel for the latest videos of the stock market.