Take a call: Analysts dial into Vi FPO

Cash-strapped Vodafone Idea's (Vi) 18,000 crore follow on public offering (FPO) is scheduled to open for subscription on April 18.

- TANMAY TIWARY

Its anchor book, however, will open on April 16, 2024.

The primary objectives of Vi FPO include boosting existing 4G infrastructure, establishing new 4G and 5G sites, and settling certain deferred payments for spectrum to the Department of Telecommunications (DOT) along with associated GST obligations.

But, should you subscribe to Vi FPO given the growth of its counterparts, Reliance Jio and Bharti Airtel, who have seen consistent rise in customer addition, and speedy rollout of 5G? Analysts say while the fundraising could strengthen Vi's infrastructure, the company faces challenges on the financial front. Unlike its competitors, Vodafone Idea has experienced a consistent decline in its user base.

"A potential financial crunch looms in 2026 when significant spectrum and adjusted gross revenue (AGR) dues of up to $4 billion become payable for Vi. Despite the discount of 15-17 per cent, Vi's path to a near-term revival seems uncertain," said Shivani Nyati, head of wealth at Swastika Investmart.

For investors looking to subscribe to the Vodafone IPO, she suggests they carefully consider the above-mentioned factors before putting in their money.