Vodafone Idea gets Rs12,600-cr as FPO subscribed 7 times
At the close of the offering, as many as 8,011.29 crore shares were sought, 6.99 times of the issue size. Qualified institutional buyers sought 19.31 times of the shares reserved for them, while non-institutional investors bid for 4.54 times of the shares earmarked for them. Retail investors were being offered shares in a price band of Rs 10-11 apiece
image for illustrative purpose
New Delhi: Debt-saddled telecom operator Vodafone Idea Ltd raised Rs 18,000 crore in India's largest ever follow-on offering (FPO) as the issue got subscribed nearly seven times after institutional investors poured in money, stock exchange data showed. At the close of the offering, as many as 8,011.29 crore shares were sought, 6.99 times of the issue size. This is the highest-ever overall subscription. The company got bids worth Rs 88,124 crore but will retain Rs 12,600 crore as per the FPO offer size. Together with Rs 5,400 crore collected from anchor investors by selling 490 crore shares prior to the market share, it raised the targeted Rs 18,000 crore.
Qualified institutional buyers sought 19.31 times of the shares reserved for them, while non-institutional investors bid for 4.54 times of the shares earmarked for them. Retail investors, who were offered the biggest chunk, bid for just a tad more than the number of shares offered to them. Shares were being offered in a price band of Rs 10-11 apiece, lower than the trading price of the share. The issue saw highest ever subscription in the qualified institutional buyers (QIBs) and HNI as well as it being the first time that large retail portion of Rs 6,300 crore was fully subscribed (at upper end of the band). Listing of FPO shares is targeted for April 25.
Vodafone Idea sold shares worth Rs 5,400 crore to institutional investors in the first phase last week. Investment firms GQG and Fidelity picked up most of the shares during the anchor book allocation. Also, the promoters have pledged to infuse an additional Rs 2,075 crore at Rs 14.87 per share post shareholder approval in EGM scheduled on May 8. The FPO is the largest ever. Prior to this, the largest FPO in the Indian market was a Rs 15,000 crore share sale by YES Bank in 2020. The fundraise 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 will also help Vodafone Idea shore up finances for the much-delayed 5G roll-out and strengthening 4G services, and payment of vendor dues. The company had previously said it plans to raise Rs 45,000 crore, via equity and debt, to help expand its 4G network and roll out 5G services. Of the total FPO proceeds, the company plans to use Rs 12,750 crore for purchase of equipment for the expansion of its network infrastructure by setting up new 4G sites; expanding the capacity of existing 4G sites and for setting up new 5G sites, as per the share sale prospectus. It will spend Rs 5,720 crore of the Rs 12,750 crore earmarked for network expansion on setting up its 5G network. Another Rs 2,175.31 crore will be utilised for making deferred payments for spectrum. The rest of the FPO proceeds will be used by the company towards various general corporate purposes such as funding working capital requirements.
