Our Bureau Vodafone Idea has announced plans to raise ₹25,000 crore through a rights issue at a price of ₹12.5 a share.

The issue is priced at a big discount to the stock’s Wednesday’s closing price of ₹33 on the BSE.

The company will issue 2,000 crore fully paid-up equity shares of face value ₹10 each at a price of ₹12.5 a share by way of a rights issue.

It will issue 87 equity shares for every 38 shares held by existing shareholders as on the record date of April 2, said the company in a statement on Wednesday.

The issue will be open for investment between April 10 and 24.

Vodafone Group and Aditya Birla Group — the promoter shareholders — have confirmed to fully subscribe to their rights issue equivalent to ₹11,000 crore and ₹7,250 crore, respectively.

In case the rights issue is undersubscribed, certain promoter shareholders have reserved their right to invest in the unsubscribed portion, subject to applicable laws, said the company.

Cost synergies

As planned, the company expects to achieve the guided cost synergies arising due to the merger by FY21, two years ahead of the initial target set in 2017, it added.

Balesh Sharma, CEO, Vodafone Idea, said the proceeds from the rights issue coupled with the monetisation of stake in Indus will help achieve strategic goals.

“We are moving faster than initially estimated on integration. The improving broadband coverage and capacity will enable us to offer a superior network experience to customers and add more broadband customers,” he added.

In nine out of 22 service areas, customers of both brands enjoy a unified network experience across 2G, 3G and 4G following the consolidation of spectrum and radio access network.

With the implementation of dynamic spectrum re-farming (DSR), on relevant 900 MHz sites, the company is able to offer 4G on 900 MHz and re-farmed 2,100 MHz spectrum from 3G to 4G usage on selected sites.

The company has reduced capex by redeploying overlapping 3G and 4G equipment and quitting low utilisation sites in certain districts.

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