Vodafone Idea to Raise ₹18,000 Crore Through FPO Next Week

12 Apr 2024 , 10:53 AM

The telecom company Vodafone Idea announced on April 12 that subscriptions for its ₹18,000-Crore follow-on public offer (FPO) would begin on April 18. A floor price of ₹10 per share and a ceiling of ₹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.

Vodafone Idea was getting ready to issue an FPO to generate ₹18,000–20,000 Crore, according to a Moneycontrol article from April 10. As lead managers for the FPO, the debt-ridden corporation has brought in Jefferies, SBI Caps, and Axis Capital, the biggest offerings of its kind in India.

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 ₹14,278. After that, bids in multiples of 1,298 equity shares are accepted from investors.

The company’s board approved raising up to ₹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 ₹2,075 Crore.

At ₹14.87 a share, the shares were issued, representing a 40% increase over the FPO floor price.

The telecom operator is rumoured to be in talks with banks to arrange loan finance in addition to the ₹20,000 Crore equity fundraise, bringing the total fundraise to ₹45,000 Crore when debt and equity are combined.

When annual spectrum and AGR payments of up to $4 billion become due in fiscal year 2026—beyond its capital expenditures and 5G rollout—Vodafone Idea may find itself in financial difficulties unless the government converts debt principal to equity at the end of the moratorium, the company stated.

There can be no new positions created in the stock for the April 12 session as it is under the F&O prohibition.

Shares of Vodafone Idea were down 4.63% at ₹12.35 on the National Stock Exchange at 10:35 a.m.

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