On April 18, Vodafone Idea will introduce a Rs 18,000 cr FPO
The State Bank of India Mutual Fund and US-based investment company GQG Partners are allegedly thinking of contributing as much as $800 million (~6,600 cr) to the forthcoming follow-on public offering (FPO) of Rs 18,000 crore by Vodafone Idea Limited (VIL).
According to a source citing two people with direct knowledge, SBI Mutual Fund is contemplating making an investment of $200 million to $300 million, while GQG, led by CEO Rajiv Jain, who was born in India, intends to spend around $500 million. Under the institutional quota, both companies are thinking about making investments.
The third-biggest telecom company in the nation, Vodafone Idea, said in February 2024 that it intended to raise around Rs 45,000 crore using a mix of debt and equity. The telecom launched a follow-on public offering (FPO) of equity shares on Friday, April 12, 2024, with a maximum amount of Rs 18,000 crore.
The FPO price was established by Vodafone Idea at between Rs 10 and Rs 11 per share. The business said in an exchange filing that the upper end of the pricing range, Rs 11, reflects a reduction of around 15% from the most recent closing price and 26% from the recently authorized preferential issuance price to the promoter entity.
Opening day for the FPO is set for April 18 and closing day on April 22. The business said that the top end of the pricing range, or Rs 11, is at a discount of 26% compared to the promoter entity’s recently authorized preferential issue price of Rs 14.87 and a 15% reduction compared to the previous closing price of Rs 12.95.
Bidding on a minimum lot of 1,298 equity shares is open to interested investors, and the minimum application amount is Rs 14,278 for one lot at the top end of the price range. Investors then have the option to bid in multiples of 1,298 equity shares.
In an effort to strengthen its finances and maintain its competitiveness, the indebted telecom is looking to borrow money. By issuing preferential shares to Oriana Investments Pte Ltd, a promoter firm within the Aditya Birla Group, for Rs 14.87 per share—a 40% increase over the FPO floor price—it just successfully raised Rs 2,075 crore. Also, it converted optionally convertible debentures (OCDs) into equity shares for its seller, American Tower Company (ATC), for a total of Rs 1,440 crore.
At now, ATC owns 2.87% of Vodafone Idea. In the meanwhile, the telecom company’s net loss for the October–December quarter decreased from Rs 8,738 crore to Rs 6,986 crore.
