In Short:
Vodafone Idea’s share sale received strong subscription from foreign investors, Indian fund houses, and insurance companies, indicating confidence in the company’s long-term plans. The company raised Rs 5,400 crore from 74 anchor investors and plans to raise Rs 18,000 crore through a follow-on public offering. The funds will be used for 5G rollout, network expansion, and improving ARPU by upgrading 2G subscribers to 4G. Brokerage IIFL Securities upgraded Vi’s rating and target price, recommending investors to subscribe to the FPO.
Vodafone Idea Raises Funds Through Share Sale, Shows Confidence in Long-Term Plans
In a recent development, Vodafone Idea’s (Vi) Chief Executive Akshaya Moondra expressed satisfaction over the strong subscription of the company’s share sale by anchor investors from foreign institutions, Indian fund houses, and insurance companies. This enthusiastic response reflects the investors’ confidence in Vi’s long-term business strategies.
Anchor Investors and Fundraising Plans
Anchor investors such as GQG, Fidelity Management Research, UBS, RWC, HDFC Mutual Fund, Motilal Oswal Mutual Fund, and Quant Mutual Fund have shown interest in Vi’s share sale. Additionally, Indian life insurance companies like SBI General and ICICI Pru Life have also participated in the fundraising. This positive reception from investors indicates a strong belief in Vi’s growth trajectory.
Vi recently raised Rs 5,400 crore from 74 anchor investors, making it the third-largest anchor book in India. The company plans to raise a total of Rs 18,000 crore through a follow-on public offering (FPO) scheduled to open on April 18 and close on April 22. A significant portion of this amount, Rs 2,075 crore, will be raised from a promoter entity, Oriana Investments Pte Ltd.
Future Plans and Financial Strategy
Vi is also in discussions with banks to secure debt funding amounting to Rs 25,000 crore. Moondra emphasized that the equity funding will pave the way for the next phase of bank funding. The company plans to allocate Rs 5,720 crore towards 5G rollout and a substantial portion for network expansion capex over the next two fiscal years.
With a focus on improving Average Revenue Per User (ARPU), Vi aims to upgrade its 2G subscriber base to 4G, a move that could significantly enhance ARPU. In light of these developments, brokerage firm IIFL Securities has upgraded Vi’s rating to ‘ADD’ and recommended investor participation in the FPO.
Looking ahead, the funding raised is expected to enable Vi to enhance its mobile broadband reach and further strengthen its position in the market.
