Vodafone Idea secures ₹5,400 crore from anchor investors
Vodafone Idea has successfully raised ₹5,400 crore from anchor investors. This accomplishment positions it as the third-largest anchor book in India, trailing behind One 97 Communications and Life Insurance Corporation. Key figures such as Telecom Minister Ashwini Vaishnaw and Finance Secretary TV Somanathan have backed the telecom company's fundraising efforts.
Global and domestic investors back Vodafone Idea
Several foreign institutional investors, including GQG Partners, UBS, Norges, Ellerston Capital, Morgan Stanley Investment Management, AustralianSuper, and Fidelity have subscribed to the telco's anchor book. Additionally, domestic mutual funds such as HDFC, Quant, and Motilal Oswal have also participated in the fundraising. The Government of India has fully supported these efforts as a significant stakeholder with a 32% stake in Vodafone Idea.
Vodafone Idea's future fundraising plans
Vodafone Idea's fundraising includes a follow-on public offer to raise ₹18,000 crore at ₹10-11 a share and a preferential allotment of ₹2,075 crore at ₹14.87 apiece to one of its founder entities. This will be followed by a debt funding of ₹25,000 crore. The share price has more than doubled in the past year and closed at ₹12.90 apiece yesterday, sliding nearly 2%.
Government support boosts investor confidence in Vodafone Idea
The government's decision to convert the telco's liabilities into equity has significantly boosted investor confidence. This move is expected to attract high net worth individuals and retail investors, potentially revitalizing the company's funding initiatives. The current ₹18,000-crore follow-on share sale will see the government stake diluted to 24%, which could rise back up to 32-33% if the Centre decides to convert some of the principal dues into more equity.
Vodafone Idea's 5G rollout plans and network expansion
Vodafone Idea is optimistic about its ₹18,000-crore follow-on public offer (FPO) receiving maximum subscription, which is crucial for launching 5G services for its future growth. The telco plans to roll out 5G services in six to nine months following the offer and expedite 5G equipment orders with vendors with which it has conducted trials. The company will use ₹12,750 crore for network expansion till FY26, including setting up new 4G and 5G sites and upgrading existing ones.
Vodafone Idea's debt and future fundraising plans
Vodafone Idea is burdened with a ₹2.1 trillion debt, including over ₹1.3 trillion owed for spectrum to the government and ₹65,000 crore in AGR dues. The debt is payable over years up to 2040-41. Post FPO, the loss-making carrier plans to raise over ₹20,000 crore from banks as part of its overall fund raise plan of ₹45,000 crore expected to close by end June.
