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Vodafone Idea allots Rs 5720 crore for 5G rollout, 4G expansion

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In Short:

Vodafone Idea plans to invest Rs 5,720 crore in 5G rollout from the Rs 18,000 crore raised from the public offer. The telco aims to bring 40% of its revenue base under 5G coverage in next 24-30 months. It also plans to upgrade 2G subscribers to 4G to improve ARPU. Government’s support has boosted investor confidence. Vi is looking to raise Rs 25,000 crore through debt funding.

Vodafone Idea Allocates Rs 5,720 Crore for 5G Rollout

Vodafone Idea, a cash-strapped telecom company, has earmarked Rs 5,720 crore for its 5G rollout. This amount is part of the Rs 18,000 crore expected to be raised from a follow-on public offer.

Investment Plans

A source familiar with the matter revealed that the total investment in 4G expansion and 5G rollout will exceed the allocated amount due to a planned debt raising of Rs 25,000 crore.

The company aims to cover 40% of its revenue base with 5G in the next 24-30 months. Additionally, Vodafone Idea will focus on refarming spectrum for better 4G coverage and expanding into 17 priority circles.

CEO Akshaya Moondra emphasized the need to upgrade 2G subscribers to 4G to boost average revenue per user (ARPU) and enable better data plans.

Financial Outlook

Speaking at the company’s follow-on public offer launch, Moondra highlighted the positive response from anchor investors. The government’s decision to convert debt into equity has boosted investor confidence.

The Government of India, Vi’s largest shareholder with a 32% stake, will see its ownership decrease to 24% post-equity dilution. This move sets the stage for potential reforms in FY26.

Public Offer Details

The follow-on public offer features allocations of 50% to qualified institutional buyers, 15% to high net-worth individuals, and 35% to retail investors.

After raising Rs 20,000 crore through equity, including a promoter infusion of Rs 2,075 crore, Vodafone Idea intends to secure Rs 25,000 crore in debt funding.

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