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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.

 

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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.

 

 

 

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Frequently Asked Questions

+

The Vodafone Idea Limited FPO is open for subscription from April 18, 2024, to April 22, 2024.

+

The price of the Vodafone Idea FPO is set in the range of Rs. 10 to Rs. 11 per share.

+

Strengths:

  • Large subscriber base
  • Extensive network infrastructure
  • Established 5G-ready network
  • Strong brand reputation

Weaknesses:

  • Significant debt burden
  • Potential legal issues
  • Intense competition in the industry
  • Recent losses
+

The decision to invest depends on your individual risk tolerance and investment goals. The company is facing challenges, but the FPO price is neutral compared to the industry average. Consider consulting a financial advisor before making a decision.

+
  • The company prospectus (RHP) - download link not provided in the content, but can be found on the company website or brokerage websites.
  • News articles and financial websites


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