New Delhi: Struggling telecom operator Vodafone Idea on Friday said it plans to raise up to Rs 18,000 crore through share sale in the biggest follow-on public offer as it tries to raise resources to stay afloat. Has been.
Under the FPO, Voda-Idea shares will be issued in the price band of Rs 10-1 as against Friday's closing price of Rs 12.96 on BSE.
The share sale will open on April 18 and close on April 22, the country's third-largest telecom carrier Vodafone Idea said in a stock exchange filing. It will be the largest FPO since Yes Bank's previous best share sale of Rs 15,000 crore in 2020.
VIL's blockbuster fundraising - which comes close to the capital infusion of Rs 2,07 crore by Aditya Birla Group through a preferential share issuance earlier this month - will help the ailing telecom company improve its position in the Indian telecom market. Will provide ammo for., where it currently lags behind big rivals like Reliance Jio and Bharti Airtel by a wide margin.
The funds will also help VIL raise finance to strengthen 4G services for the much-delayed 5G rollout and repay vendor dues. Burdened with debt of Rs 2.1 lakh crore and quarterly losses, VIL is facing month-on-month loss to customers. And is fighting a serious battle for survival.
According to a BSE filing on Friday, VIL's follow-on offer will open on April 1 and close on April 22.
"The board of directors of the company in its meeting held on April 11, 2024 approved the further public offering (FPO) of equity shares worth up to Rs 18,000 crore.“The capital raising committee, in its meeting today, April 12, approved the price band for the FPO issue through 2024,” the company said in a BSE filing. However, after the announcement of the Rs 18,000 crore FPO on Friday, initial Vodafone Idea shares fell in trading. It closed the day at Rs 12.96, slightly higher than its previous close.
The minimum price for the mega offer has been fixed at Rs 10 and the maximum limit has been fixed at Rs 1 per equity share.
The high end of the price band (Rs 11) is at a discount of about 26 per cent compared to the recently approved preferential issue price of Rs 14.87 for the promoted unit and about 15 per cent discount compared to the low closing price.The minimum bid lot will be 1,298 equity shares and thereafter in multiples of 1,290 equity shares, the company said.
Back of the envelope calculations show that at the upper end of the price band, the minimum application amount for shares of a stock would be Rs 14,278.
"...pursuant to the approval given by the Board of Directors of the Company at its meeting held on February 27, 2024 and in pursuance of the special resolution passed by the Members of the Company on April 2, 2024, the Board at its meeting held today i.e. April 11, 2024... “A resolution was passed to approve the filing of the red herring prospectus on April 11, 2024, with the Registrar of Companies, Gujarat at Ahmedabad in respect of further public offering of equity shares, aggregating up to Rs 18,000 crore,” VIL said. VIL said it will participate in road shows and interact with investors and analysts in various cities across India from April 15, 2024 till the bid closing day.The Board has also fixed the period for anchor investor bid/proposal as 16 April 2024.
VIL's recent preferential issue has been a precursor to this big fundraising plan by the distressed telco. On April 6, Vodafone Idea's board approved raising Rs 2,075 crore from promoter Aditya Birla Group and increasing its authorized share capital to Rs 1 lakh crore. Gave it.
Vodafone Idea board had approved the issue of 1,395,427,034 equity shares of face value Rs 10 each at an issue price of Rs 14.87 per equity share (including premium of Rs 4.87 per equity share), aggregating to Rs 2,07 crore. Oriana Investments Pte Ltd (an Aditya Birla Group entity which is part of the promoter group), on preferential basis.The company's shareholders gave the green signal to raise up to Rs 20,000 crore by issuing securities at an extraordinary general meeting (EGM) held on April 2. Earlier this year, Vodafone Idea raised Rs 45,000 crore through a mix of equity and debt. The mobilization plan was outlined as it was meant to match the services offered by rivals Reliance Jio and Bharti Airtel and prevent a worrisome and prolonged customer churn.
According to TRAI data, Vodafone Idea's condition was poor on the subscriber front. VIL lost 15.2 lakh wireless subscribers in January, reducing its mobile subscriber base to 22.15 crore, a sharp contrast to subscriber gains by Jio and Airtel.
The completion of the Rs 45,000 crore plan should enable VIL to increase network capex and narrow the gap with peers on 4G coverage and 5G rollout, Citi said in a note.“With a possible post-poll tariff hike and the possibility of AG relief (case pending in the Supreme Court), this should significantly enhance VIL's cash flow position,” the brokerage report said.
However, VIL may face cash crunch from 2H FY26 (second half of FY26) even after the government's ongoing moratorium on AGR and spectrum repayments ends, unless the government manages to convert these dues into equity. Does not use the option, it said. A key uncertainty remains from both a cash flow and equity dilution perspective. “Nonetheless, we are encouraged by the progress towards the fund raising and believe this will provide further growth for Indus Towers,” Citi said."
Under the FPO, Voda-Idea shares will be issued in the price band of Rs 10-1 as against Friday's closing price of Rs 12.96 on BSE.
The share sale will open on April 18 and close on April 22, the country's third-largest telecom carrier Vodafone Idea said in a stock exchange filing. It will be the largest FPO since Yes Bank's previous best share sale of Rs 15,000 crore in 2020.
VIL's blockbuster fundraising - which comes close to the capital infusion of Rs 2,07 crore by Aditya Birla Group through a preferential share issuance earlier this month - will help the ailing telecom company improve its position in the Indian telecom market. Will provide ammo for., where it currently lags behind big rivals like Reliance Jio and Bharti Airtel by a wide margin.
The funds will also help VIL raise finance to strengthen 4G services for the much-delayed 5G rollout and repay vendor dues. Burdened with debt of Rs 2.1 lakh crore and quarterly losses, VIL is facing month-on-month loss to customers. And is fighting a serious battle for survival.
According to a BSE filing on Friday, VIL's follow-on offer will open on April 1 and close on April 22.
"The board of directors of the company in its meeting held on April 11, 2024 approved the further public offering (FPO) of equity shares worth up to Rs 18,000 crore.“The capital raising committee, in its meeting today, April 12, approved the price band for the FPO issue through 2024,” the company said in a BSE filing. However, after the announcement of the Rs 18,000 crore FPO on Friday, initial Vodafone Idea shares fell in trading. It closed the day at Rs 12.96, slightly higher than its previous close.
The minimum price for the mega offer has been fixed at Rs 10 and the maximum limit has been fixed at Rs 1 per equity share.
The high end of the price band (Rs 11) is at a discount of about 26 per cent compared to the recently approved preferential issue price of Rs 14.87 for the promoted unit and about 15 per cent discount compared to the low closing price.The minimum bid lot will be 1,298 equity shares and thereafter in multiples of 1,290 equity shares, the company said.
Back of the envelope calculations show that at the upper end of the price band, the minimum application amount for shares of a stock would be Rs 14,278.
"...pursuant to the approval given by the Board of Directors of the Company at its meeting held on February 27, 2024 and in pursuance of the special resolution passed by the Members of the Company on April 2, 2024, the Board at its meeting held today i.e. April 11, 2024... “A resolution was passed to approve the filing of the red herring prospectus on April 11, 2024, with the Registrar of Companies, Gujarat at Ahmedabad in respect of further public offering of equity shares, aggregating up to Rs 18,000 crore,” VIL said. VIL said it will participate in road shows and interact with investors and analysts in various cities across India from April 15, 2024 till the bid closing day.The Board has also fixed the period for anchor investor bid/proposal as 16 April 2024.
VIL's recent preferential issue has been a precursor to this big fundraising plan by the distressed telco. On April 6, Vodafone Idea's board approved raising Rs 2,075 crore from promoter Aditya Birla Group and increasing its authorized share capital to Rs 1 lakh crore. Gave it.
Vodafone Idea board had approved the issue of 1,395,427,034 equity shares of face value Rs 10 each at an issue price of Rs 14.87 per equity share (including premium of Rs 4.87 per equity share), aggregating to Rs 2,07 crore. Oriana Investments Pte Ltd (an Aditya Birla Group entity which is part of the promoter group), on preferential basis.The company's shareholders gave the green signal to raise up to Rs 20,000 crore by issuing securities at an extraordinary general meeting (EGM) held on April 2. Earlier this year, Vodafone Idea raised Rs 45,000 crore through a mix of equity and debt. The mobilization plan was outlined as it was meant to match the services offered by rivals Reliance Jio and Bharti Airtel and prevent a worrisome and prolonged customer churn.
According to TRAI data, Vodafone Idea's condition was poor on the subscriber front. VIL lost 15.2 lakh wireless subscribers in January, reducing its mobile subscriber base to 22.15 crore, a sharp contrast to subscriber gains by Jio and Airtel.
The completion of the Rs 45,000 crore plan should enable VIL to increase network capex and narrow the gap with peers on 4G coverage and 5G rollout, Citi said in a note.“With a possible post-poll tariff hike and the possibility of AG relief (case pending in the Supreme Court), this should significantly enhance VIL's cash flow position,” the brokerage report said.
However, VIL may face cash crunch from 2H FY26 (second half of FY26) even after the government's ongoing moratorium on AGR and spectrum repayments ends, unless the government manages to convert these dues into equity. Does not use the option, it said. A key uncertainty remains from both a cash flow and equity dilution perspective. “Nonetheless, we are encouraged by the progress towards the fund raising and believe this will provide further growth for Indus Towers,” Citi said."
