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Vodafone Idea FPO worth Rs 18,000 cr to open on Apr 18

Vodafone Idea FPO worth Rs 18,000 cr to open on Apr 18

| @indiablooms | 14 Apr 2024, 06:44 pm

Mumbai: Vodafone Idea has announced its follow-on public offer (FPO) worth Rs 18,000 crore which will be open for subscription starting April 18.

The floor price is set at Rs 10 per share and a cap at Rs 11. The FPO will conclude on April 22, with anchor bids to be approved on April 16, as stated in the company's filing to the exchange.

The company, burdened with debt, has appointed Jefferies, SBI Caps, and Axis Capital as lead managers for this substantial offering, marking it as one of the largest in India.

Investors can participate with a minimum bid lot of 1,298 equity shares, with the minimum application amount set at Rs 14,278 for one lot of shares at the upper end of the price band. Subsequent bids can be made in multiples of 1,298 equity shares.

The FPO follows the approval by the company's board on February 27 to raise up to Rs 20,000 crore through equity.

Recently, the company raised Rs 2,075 crore through the issuance of preferential shares to one of its promoter entities, Oriana Investments Pte Ltd, affiliated with the Aditya Birla Group. These shares were priced at Rs 14.87 each, marking a 40 percent increase from the FPO floor price.

In addition to the planned equity raise of Rs 20,000 crore, the telecom operator is reportedly in discussions with banks to secure debt funding, aiming for a total capital infusion of Rs 45,000 crore through a combination of equity and debt.

According to a recent report by brokerage CLSA, Vodafone Idea's shares could decline to Rs 5, following a loss of 17 million subscribers over the past year. Beyond its capital expenditure and 5G deployment, the company may encounter financial pressure in fiscal year 2026, when annual spectrum and AGR payments totaling up to $4 billion become due, unless the government converts debt principal into equity at the end of the moratorium. CLSA has reiterated its "sell" rating on the stock, reported Moneycontrol.

Although Vodafone Idea's shares have doubled over the past year, they have dropped by 30 percent from their recent peak. As of the April 12 session, the stock is under F&O ban, meaning no new positions can be initiated, reported Moneycontrol

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