Vodafone Idea’s follow on public offer has been fully subscribed on the last daye of the issue. Clinching a subscription rate of 107 per cent on the 1260 crore shares on offer, India’s third largest telecom operator has successfully raised ₹18,000 crore it targeted from the public issue.
According to data shared with the Bombay Stock Exchange, the FPO was subscribed 1.48 times by institutional investors, 1.33 times by high networth individuals, 0.47 times by retail or individual bidders.
This along with the ₹2000 crore which was infused by the Birla Group, allows the telco to hit the target Rs 20,000 crore of equity fundraise that it had planned for itself. Promoters’ equity (Vodafone Plc, Aditya Birla Group) goes down from a 50 per cent stake to the range of 37.3-38.2 per cent. Similarly, the government’s stake in the telco will go down from 33 per cent to around 24 per cent after the shares are issued.
Vi believes that these funds raised will be sufficient to plug holes in its 4G network. In their red herring prospectus the firm noted that they will add 26,000 new 4G sites in the next two financial years, After a delay of nearly two years, Vodafone Idea will also be launching its 5G network with this fundraise. Although coverage for 5G will be minimal for all intents and purposes,
Vi is likely to commence the process of raising debt of ₹25,000 from banks soon. In an interview with businessline Vodafone Idea CEO Askhay Moondra noted that, “We are looking at overall funding which is primarily meant for growth capex. Dues to vendors, banks, spectrum and AGR will be met by internal cash generation and the new funding in the form of equity and debt is meant for growth capex.” Vodafone Idea’s RHP noted however that as of December 2023, the firm had ₹13,807 crore owed trade payables or vendor payments which will be cleared after the FPO.
FPO was priced at ₹10-11 apiece, at the time of filing the report, Vi shares were trading at ₹12.25, down by 5.4 per cent of the previous closing price.