In Short:
Vodafone Idea (Vi) is set to raise Rs 18,000 crore through a follow-on public offer (FPO) scheduled for April 18-22, 2024. The telco recently raised Rs 2,075 crore through preferential shares and plans to raise a total of Rs 45,000 crore through equity and debt. With the funds raised, Vi aims to pay off dues, expand its 4G network, and potentially increase profits in the long run.
Vodafone Idea (Vi) Announces Follow-on Public Offer (FPO) to Raise Rs 18,000 Crore
Vodafone Idea (Vi), the third-largest telecom operator in India, has announced that its follow-on public offer (FPO) to raise Rs 18,000 crore will be on April 18, 2024. It will close on April 22, 2024. For the anchor investors, it will open two days earlier on April 16, 2024. The telco’s board met on April 11 to pass these dates for raising funds through equity. Vi recently raised Rs 2,075 crore through the issue of preferential shares to Oriana Investments Pte Limited, a subsidiary of the Aditya Birla Group.
Road Shows and Investor Interaction
The telco said that it is going to participate in road shows and interact with the investors/analysts starting from the week of April 15, 2024, up to the bid closing date. On April 12, i.e., today, the telco’s Capital Raising Committee is set to meet to consider and approve, amongst other things, the price band and discount, if any, as permitted under the provisions of the SEBI ICDR regulations.
Fundraising Plans
Vi plans to raise Rs 20,000 crore through equity. This FPO will help it reach that goal. The telco also wants to raise another Rs 25,000 crore through debt. This capital will help Vi pay off upcoming dues and also enable the company to increase its capex to expand the reach of its 4G networks. For years now, Vi has been trying to raise funds but hasn’t been able to.
Positive Outlook
But this time, things are moving much faster. Lending institutions may consider giving money to Vi as the telco has been clearing bank dues fast. The majority of the Vi dues are towards the government. With this fundraising and an imminent tariff hike post the central elections in the June-July 2024 period, things look a little good for Vi in the short term. However, to perform well in the long-run, the telco needs to improve basics and reach a point of profitability.
