In Short:
Vodafone Idea will open a public offer to raise up to Rs 18,000 crore from April 18-22 at a price of Rs 10-11 per share to improve its financial situation. The offering is undersubscribed as an anchor investor already secured their portion. The company aims to raise Rs 45,000 crore through equity and debt to compete with its rivals, Airtel and Jio.
Vodafone Idea to Launch Follow-On Public Offer to Raise Funds
Vodafone Idea (Vi) has announced it will open a follow-on public offer to raise up to Rs18,000 crore on April 18 and close it on April 22. The company has priced the issue in the Rs10-11 band, aiming to bring in crucial capital for its survival.
Key Details of the Offer
The floor price of the offer is set at Rs10 per Equity Share, with a cap price of Rs11 per Equity Share. The minimum bid lot is 1,298 Equity Shares, with bids to be placed in multiples of 1,298 shares thereafter.
Timeline and Committee Meeting
The Capital Raising Committee is scheduled to meet on April 12 to consider and approve the Price Band and other related matters. The Anchor Investor Bid/Offer Period is set to begin on April 16.
Market Response and Appointed Bankers
The FPO has already garnered interest from investors, with the anchor investor portion fully subscribed. Jefferies, SBI Capital, and JM Financials have been appointed as the bankers for the public offer.
Future Funding Plans
After the FPO, Vodafone Idea plans to secure debt funding of around Rs25,000 crore. The company has also approved a preferential share issue to raise Rs2,075 crore from an Aditya Birla Group entity.
Strategic Importance of Funding
The funding program is critical for Vi’s revival and growth plans, including strengthening its network, launching 5G services, and repaying vendors. Vi aims to compete with industry giants like Reliance Jio and Bharti Airtel in the telecom market.
Financial Challenges and Outlook
Vi faces significant debt obligations, including AGR dues, and the need for substantial capital infusion to stay competitive in the market. The company’s net debt stands at Rs2.14 lakh crore, highlighting the urgency of raising funds for its operations.
