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Vodafone Idea was probably singing the hit ABBA song ‘Money Money Money’ as it launched India’s biggest follow-on public offering to raise ₹18,000 crore. 

It also plans to raise another ₹27,000 crore in debt as it looks to flatten its debt and catch up with competitors. To be fair, the struggling telco needs all the cash it can get. 

The FPO was fully subscribed by the last day of the offering, with institutional buyers leading the charge. Big names like GQG Partners, UBS Fund Management and Fidelity Investments joined the party as well.  

While Vodafone plans to use the fresh money to expand its 4G network, make headway into 5G and pay off some dues, the big question remains: Is it enough?

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The short answer is: only for a while. Most analysts think the raise will help shore up the company’s cashflow but won’t make much of a dent in terms of market share, which it has consistently been losing to Jio and Airtel.

The 4G network expansion and expected industry tariff hikes could help it improve its abysmal average revenue per user numbers, but it’s unlikely that Vodafone can compete on price when it comes to 5G. 

Moreover, if Vodafone can’t pay its outstanding dues to the government by FY26, it’s likely that the government (already its biggest shareholder) could convert the dues into equity of up to 80%, which would mean dilution for minority shareholders.

Add to that the fact that many analysts believe that the company’s valuations are stretched in relation to its earnings and in comparison to better-performing peers like Airtel.

That said, it will be interesting to see what Vodafone does with full pockets for once.

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