Unlock the potential for large fundraising with Vodafone Idea’s FPO, which has been approved by IIFL Securities. Learn more about investor opinion and the telecom giant’s recovery plan.
The shares of Vodafone Idea Ltd have been raised to a ‘Add’ rating by domestic brokerage IIFL Securities, a move that indicates optimism in tough times. The telecom giant’s follow-on public offer (FPO) worth Rs 18,000 crore is being recommended in conjunction with this upgrade. The FPO, which is scheduled to start on April 18 and end on April 22, promises to improve Vodafone Idea’s financial situation.
Hope for a Better Future
With a price range of Rs 10–11 per share, the FPO gives investors a chance to participate in the company’s comeback. IIFL Securities highlights the FPO price’s good upside potential, which is supported by a number of variables working together. The brokerage draws attention to three key points: the substantial fundraising component, the possibility of increasing average revenue per user (ARPU), and the expected positive result of the Supreme Court’s Adjusted Gross Revenue (AGR) verdict.
Raising Money for Development
An estimated Rs 450 billion in capital might be made available to Vodafone Idea via an equity infusion and subsequent debt borrowing. With this infusion of funding, it will be able to close the capacity and coverage gap with its rivals for 4G. Vice President of IIFL Securities Balaji Subramanian predicts strong growth, with ARPU expected to rise from Rs 145 in the previous fiscal year to Rs 241 by FY27.
Consolidating the Infrastructure
The funding injection is designated for capital expenditure, with the goal of strengthening infrastructure and reducing the disparity between coverage and capability across peers. It is expected that a planned capital expenditure of Rs 550 billion during FY25–27 would reduce customer attrition and strengthen Vodafone Idea’s position in the market.
Prospects for the Future
Vodafone Idea has shown its commitment to technical innovation and market competitiveness by strategically allocating FPO earnings towards the introduction of 5G services and extra capital expenditures. Plans to pay down debt, which is anticipated to be around Rs 30,000 crore if the AGR dues moratorium is lifted, also show a deliberate attempt to achieve financial stability.
Attitude of Investors
Vodafone Idea’s stock saw a little decrease of about 2% on Tuesday, ending at Rs 12.9 per share on the BSE, despite the positive outlook. Still, the general consensus is cautiously hopeful, with interested parties looking forward to seeing how the FPO plays out and how it will affect the company’s future.
Final Thoughts
Ultimately, the fact that IIFL Securities has approved Vodafone Idea’s FPO shows that investors are once again optimistic about the telecom giant’s prospects for recovery. A dramatic path is ahead thanks to the confluence of strategic fundraising activities, operational advances, and regulatory certainty.
