Vodafone Idea Limited is the third largest telecommunications service provider in India based on subscriber base. They are the sixth largest cellular operator globally in terms of number of subscribers in a single country of operations. Through the pan India network, they offer voice, data, enterprise and other valueadded services (“VAS”), including short messaging services and digital services across 2G, 3G and 4G technologies. They also offer connectivity services to enterprise customers. They hold active licenses for national long distance (“NLD”), international long distance (“ILD”) and internet service provider (“ISP”), and registration for infrastructure provider (“IP-1”) services. They carry inter-service area voice traffic and incoming and outgoing international voice traffic on the network, which is facilitated through interconnections with the active licenses. For the quarter ended December 31, 2023, the applicable gross revenue (“ApGR”) market share was 17.79% of the Indian mobile telecommunications services industry. As of December 31, 2023, they had over 223.0 million subscribers and a subscriber market share of 19.3%. Furthermore, for the quarter ended December 31, 2023, they carried approximately 401 billion voice minutes and approximately 6,004 billion MB of data on the network. The promoters are part of the Aditya Birla group and the Vodafone group. The Aditya Birla group is one of the largest business groups in India and a leading global conglomerate. As of March 31, 2023, the Aditya Birla group had a presence in 40 countries across diverse sectors such as cement, metals and mining, mobile telecommunications, fashion retail, financial services, textiles, carbon black, trading, chemicals, renewables, paints, real estate and jewellery retail. During Financial Year 2023, Aditya Birla group’s overseas revenues were also derived from operations in North and South America, Europe and Asia (excluding India). The Vodafone group is the largest pan-European and African telecommunications company. As of December 31, 2023, the Vodafone group provides mobile and fixed services to over 300 million customers in 17 countries and has collaborations with mobile networks in 45 other countries. The Vodafone group also has one of the world’s largest Internet of Things (“IoT”) platforms. As of December 31, 2023, they have an aggregate of 8,005.2 MHz of spectrum holdings across different frequency bands, of which 7,975.2 MHz spectrum is liberalized and can be used towards deployment of any technology (2G, 3G, 4G or 5G). This includes the mid-band 5G spectrum (3300 MHz band) in 17 priority service areas and mmWave 5G spectrum (26 GHz band) in 16 service areas. As of December 31, 2023, they had approximately 183,400 unique tower locations and over 438,900 broadband (3G and 4G) sites, with all the 4G sites enabled for the provision of voice over LTE (“VoLTE”) services. As of December 31, 2023, the population coverage exceeded 1.2 billion individuals, and the OFC spanned over 298,000 kilometres, combining both the own infrastructure and indefeasible rights of use (“IRU”) taken (excluding overlaps). The mobile network also reaches a vast number of communities across more than 487,000 towns and villages in India, with broadband services in more than 342,200 towns and villages, each as of December 31, 2023. Through the robust infrastructure, they carry most of the domestic and international outbound traffic on the own network for optimal efficiency. Additionally, they generate revenue by partnering with other telecommunication companies to carry incoming international traffic to India. All the services and products are offered under the brand backed by strong brand recall of the Vodafone and Idea brands and cumulatively more than three decades of operations. The total income for the Financial Year 2023 and nine months ended December 31, 2023 was Rs 424,885 million and Rs 321,256 million, respectively. As per financial performance, Vodafone Idea Limited has posted total income / net profits of Rs 42,126.4 Cr / Rs (44,233.1) Cr (FY21), Rs 38,644.9 Cr / Rs (28,245.4) Cr (FY22), Rs 42,488.5 Cr / Rs (29,301.1) Cr (FY23) and Rs 32,125.6 Cr / Rs (23,563.8) Cr (Q3 FY24). So as per previous financials data, company has posted continuous losses. Company has an average EPS of Rs (10.06) and average RoNW of - for last three fiscals. Issue is priced at a P/BV of (0.55) as per NAV of (20.12) as on 31.12.23. If we attribute latest earnings of FY22, FY23, TTM and annualised FY24 on fully diluted equity post issue, then asking price is at a P/E of around (2.59), (2.50), (2.46) and (2.33) respectively, which looks fully priced. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, three lead managers are associated with this IPO, and have handled around 49 IPOs in last three fiscals. Axis Capital Limited: This is 30th Main Board IPO from this BRLM. From last 10 Main Board IPOs, four opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, four are trading below issue price and remaining are trading above issue price.( As on 12.04.2024 ) Jefferies India Private Limited: This is 6th Main Board IPO from this BRLM. From last 5 Main Board IPOs, one opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 5 Main Board IPOs, one is trading below issue price and remaining are trading above issue price.( As on 12.04.2024 ) SBI Capital Markets Limited: This is 16th Main Board IPO from this BRLM. From last 10 Main Board IPOs, five opened below issue price and remaining opened above issue price on the day of listing. As of now, from last 10 Main Board IPOs, three are trading below issue price and remaining are trading above issue price.( As on 12.04.2024 ) As per financials, Vodafone Idea Limited has shown average results, RoNW is - and P/E is respectively (2.59), (2.50), (2.46) and (2.33) as per FY22, FY23, TTM and annualised FY24 earnings. So, company had posted continuous losses. Company is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services. The growth of the sector will be average. Performance of BRLMS are good. So, we give AVOID rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.
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