Vodafone Idea's ₹18,000 crore FPO starts April 18
Vodafone Idea has officially announced the launch of a follow-on public offering (FPO) of its equity shares, valued at ₹18,000 crore. According to a company statement, the telecom giant's FPO is set to open on April 18 and conclude on April 22. The bidding process for anchor investors will commence on April 16. Following the announcement of the FPO, Vodafone Idea shares experienced a 5.03% drop to ₹12.28 during Friday's trading session.
FPO offered at significant discount
The FPO is being offered at a "significant discount" compared to the ₹14.87 per share price set for a preferential issue to one of the promoters. The price range for this substantial offer has been established at ₹10 to ₹11 per equity share. This pricing represents a discount of approximately 26% compared to the recently approved preferential issue price and about 15% lower compared to the last closing price of ₹12.95.
Funds to accelerate 5G rollout and expand 4G coverage
Vodafone Idea plans to use the funds raised from this equity offering, along with an additional debt funding of around ₹25,000 crore, to expedite its 5G network service rollout within six to seven months after securing the funds. The company also aims to expand its existing 4G coverage. However, specific details regarding this debt funding have not been disclosed yet.
Vodafone Idea's financial struggles and future plans
The board of the financially distressed telecom company has approved a preferential share issue to raise ₹2,075 crore from an Aditya Birla Group entity. This move is part of a broader funding program crucial for the revival of Vodafone Idea. As of December 31, 2023, the company reported a total debt of ₹2.15 trillion, including deferred spectrum payment obligations owed to the government.
