AHEAD OF FPO, Vi ANCHOR BOOK SUBSCRIBED 2x
Ahead of the launch of its ~18,000 crore follow-on public offer (FPO), Vodafone Idea (Vi) has allotted 4.9 billion shares to anchor investors at ~11 apiece — the top end of the price band — raising ~5,400 crore. The demand in the anchor investor category was two-three times more than the shares on offer, revealed people involved with India’s largest FPO.
A total of 74 schemes received allotments in the anchor category, with Usbased GQG Partners subscribing to ~1,347 crore worth of shares, nearly a quarter of the available shares in the anchor category. Other large subscribers included Fidelity, Stichting, Redwheel, Motilal Oswal Mutual Fund, and Troo Capital.
Vi’s anchor book allotment was the third-largest — after Paytm and Life Insurance Corporation raised ~8,325 crore and ~5,627 crore, respectively, in their anchor rounds. Of the total anchor book, 16.2 per cent was allotted to five domestic mutual funds — HDFC, Motilal Oswal, Quant, Baroda BNP, and 360One — through 11 schemes.
A banker handling the share sale said: “The higher demand will spill over onto the main book.”
He further said that GQG is likely to invest more in the main book. Initial reports suggested that GQG was eyeing an investment of over ~4,000 crore in the Vodafone Idea FPO.
The allottees were decided after a meeting of the ‘capital raising committee’ of the telecom company late on Tuesday. An anchor allotment is made a day before the FPO opens. As Wednesday was a market holiday, the offer will open for subscription on Thursday and close on Monday. Axis Capital, Jefferies India, and SBI Capital are the investment banks managing the share sale.
Market players said that the encouraging demand seen in the anchor category would boost sentiment ahead of the cash-strapped telco’s FPO. The company is also struggling with the loss of subscribers to stronger rivals Reliance Jio Infocomm and Bharti Airtel.
Vi has set the FPO price band at ~10-11 per share. The stock ended at ~12.9 on Tuesday, down 1.9 per cent from its previous close. The upper end of the price band is nearly 15 per cent below the current stock price.