Vodafone Idea: Launching a Rs. 18 billion FPO to Start on a Path to Financial Revival
The telecom company Vodafone Idea announced on April 12 that subscriptions for its Rs 18,000-crore follow-on public offer (FPO) would begin on April 18. A floor price of Rs 10 per share and a ceiling of Rs 11 have been set for the issue.
The deal expires on April 22. The company stated in an exchange filing that the anchor bids will be accepted on April 16.
April 10 Vodafone Idea was preparing to start an FPO to raise Rs 18,000–20,000 crore. As lead managers for the FPO—the biggest offers of its kind in India—the indebted company has brought on Jefferies, SBI Caps, and Axis Capital.
A minimum bid lot of 1,298 equity shares is available to investors. For one batch of shares in the FPO, the minimum application amount, depending on the top end of the price band, is Rs 14,278. After that, bids in multiples of 1,298 equity shares are accepted from investors.
The company’s board approved raising Rs 20,000 crore via stock on February 27, which led to the FPO.
Preferential shares were recently issued by the company to Oriana Investments Pte Ltd, a promoter entity within the Aditya Birla Group, to raise a total of Rs 2,075 crore.
At Rs 14.87 a share, the shares were issued, representing a 40% increase over the FPO floor price.
The telecom operator is rumored to be in talks with banks to arrange loan finance in addition to the Rs 20,000 crore equity fundraise, bringing the total fundraise to Rs 45,000 crore when debt and equity are combined.
Brokerage CLSA recently stated that Vodafone Idea’s shares could drop to Rs 5 following the company’s 17 million subscriber loss over the previous 12 months.
Beyond its capex and 5G rollout, Vodafone Idea may face a financial crunch in fiscal year 2026 when annual spectrum and AGR payments worth up to $4 billion will fall due unless the government converts debt principal to equity at the end of the moratorium, it said.
The brokerage maintained its “sell” rating on the stock.
Shares of Vodafone Idea have doubled over the last 12 months, though the stock has corrected 30 percent from its recent peak.
For the April 12 session, the stock is in the F&O ban, which means no new positions can be created in the stock.
At 9.35 am, shares of Vodafone Idea were trading 2 percent lower at Rs 12.65 on the National Stock Exchange.
