Vodafone Idea shares rebound 8% from day's low level; here's why

Vodafone Idea Ltd shares turned positive during Friday's fag-end trade. During the initial session, the stock slipped 5.41 per cent to hit an intraday low of Rs 12.23. It later rebounded 8.42 per cent from day's low value to hit Rs 13.26-level. The scrip eventually settled 0.23 per cent higher at Rs 12.96 on BSE.

The counter saw heavy trading volume today as around 15.82 crore shares changed hands. This was way more than the two-week average volume of 9.25 crore shares. Turnover on the counter came at Rs 200.49 crore, commanding a market capitalisation (m-cap) of Rs 63,089.05 crore.

The sudden recovery came after news agency Reuters reported, citing sources, that US-based investment firm GQG Partners and State Bank of India Mutual Fund are considering investing in Voda Idea's Rs 18,000 crore follow-on public offer (FPO). The FPO will open on April 18, 2024 and conclude on April 22, 2024. An official statement on the same is awaited.

The floor price for the FPO has been set at Rs 10 and cap will be at Rs 11 per equity share.

VIL had earlier mentioned that the fundraising will enable it to make investments towards significant expansion of 4G coverage, 5G network rollout and capacity expansion.

Telco's chief executive Akshay Moondra, in an earnings call, anticipated that the operator could roll out its 5G services within six to seven months after it raises funds.

Vodafone Idea was formed in 2018 when Vodafone Group merged its India business with Idea Cellular. The company, in which Vodafone owns more than 25 per cent, is the country's third-biggest operator.

As of December 2023, promoters held 50.36 per cent stake in the company.