Vodafone Idea’s Big Fundraising Move
Vodafone Idea is set to launch a Follow-on Public Offer (FPO) of equity shares worth Rs 18,000 crore next week. The FPO is scheduled to open on April 18 and close on April 22, as per the exchange filing. The company also revealed that the anchor investor offers will be approved on April 16.
Price Band and Offering Details
The telecom service provider has set the price band for its FPO between Rs 10 to Rs 11 per share. Investors have the opportunity to bid for a minimum bid lot of 1,298 equity shares. At the upper end of the price band, the minimum application amount totals Rs 14,278 for one lot of shares in the FPO. Subsequently, investors can bid in multiples of 1,298 equity shares thereafter.
Approval Process and Red Herring Prospectus
The board has given its approval for the adoption and filing of the Red Herring Prospectus (RHP) for the FPO with the Registrar of Companies, Gujarat. Furthermore, the telecom service provider’s Capital Raising Committee is set to convene later on Friday to consider and approve the price band and discount for the FPO.
Raising Capital Amidst Financial Challenges
This FPO initiative follows the approval by Vodafone Idea’s board on February 27 to raise up to Rs 20,000 crore via equity. Recently, the company successfully raised Rs 2,075 crore through the issuance of preferential shares to Oriana Investments Pte Ltd., a promoter entity belonging to the Aditya Birla Group. Besides the equity fundraise of Rs 20,000 crore, Vodafone Idea is reportedly in discussions with banks to secure debt funding, aiming for a total fund raise of Rs 45,000 crore through a combination of equity and debt.
Market Outlook and Concerns
In a note on Wednesday, brokerage firm CLSA expressed concerns about Vodafone Idea’s future, highlighting a potential decline in shares to as low as Rs 5. The note cited a loss of 17 million subscribers over the past year and speculated about financial challenges in fiscal year 2026, particularly regarding annual spectrum and AGR payments totaling up to $4 billion. Despite doubling over the last 12 months, shares of Vodafone Idea have corrected by 30% from their recent peak.
Vodafone Idea’s announcement of the Rs 18,000 crore FPO marks a significant move in its efforts to raise capital amidst financial challenges. The price band and offering details provide insights into the investment opportunity for potential investors. However, concerns raised by brokerage firms about the company’s future add a layer of caution for investors considering participation in the FPO.
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