Vodafone Idea Announces Rs 18,000 Crore FPO; Offer Opens On Apr 18

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New Delhi: Cash-strapped Vodafone Idea on Friday announced a follow-on public offer of up to Rs 18,000 crore at a price band of Rs 10-11 per share, marking the biggest FPO in the country. The fundraise -- which comes close on the heels of a Rs 2,075-crore fund infusion by Aditya Birla group via a preferential share issue earlier this month, would give the ailing telco the firepower to improve its positioning in the Indian telecom market, where it currently trails larger rivals such as Reliance Jio and Bharti Airtel, by a wide margin.

The funds would also help VIL shore up finances for the much-delayed 5G rollout and strengthening 4G services, and in payment of vendor dues. VIL has been hemorrhaging subscribers month after month and fighting a desperate battle for survival saddled with debt of Rs 2.1 lakh crore and quarterly losses.

According to a statutory filing on Friday, VIL's follow-on offer will open on April 18 and close on April 22. "The Board of Directors of the company, at its meeting held on April 11, 2024, approved Further Public Offering (FPO) of equity shares, aggregating up to Rs 18,000 crore. The capital raising committee in its meeting held today that is April 12, 2024, approved the price band for the FPO issuance," the company said in a BSE filing.

Vodafone Idea shares, however, tanked in early trade following the announcement of the Rs 18,000-crore FPO. The floor price for the mega offer has been set at Rs 10 and the cap at Rs 11 per equity share.

The higher end of the price band (Rs 11) is at a discount of about 26 percent compared to the recently approved preferential issue price to the promoter entity at Rs 14.87 and a discount of about 15 percent compared to the last closing price of Rs 12.95.

A minimum bid lot will be 1,298 equity shares and in the multiples of 1,298 equity shares, thereafter, the company said. The back-of-the-envelope calculations show that at the upper end of the price band, the minimum application amount would add up to Rs 14,278 for a single lot of shares.

The board has also fixed the anchor investor bid/offer period to be April 16, 2024. The recent preferential issue of VIL has been a precursor of sorts to this blockbuster fundraising plan by the crisis-ridden telco.