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Vodafone Idea FPO: Troubled telco looks to raise ₹18000-20000 crore next week
Troubled Vodafone Idea FPO likely to be rolled out soon; racked by debt, operational losses and more, company needs a huge liquidity infusion.
Over the years, Vodafone Idea has gone from being one of the biggest telecom companies in India to a pale shadow of its former self and is now a distant third after Reliance Jio and Bharti Airtel. Now, it has been revealed that the company plans to launch an FPO, most probably in the coming week, to raise ₹18,000-20,000 crore. This come quickly in the wake of yet another big news concerning the company. It was announced last Saturday that the board has approved raising ₹2,075 crore from Aditya Birla Group by increasing the authorized share capital to ₹1 lakh crore for which the company will seek shareholders' approval on May 8. This proposal includes issuing 1,395,427,034 equity shares at ₹14.87 each.
Vodafone Idea FPO
As far as the Vodafone Idea FPO is concerned, it has been reported that Jefferies, SBI Caps, and Axis Capital will be the lead managers, according to a report by MoneyControl.
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The significance of this FPO, apart from likely being a lifeline for Vi, is that till now, the biggest such issue was that of Yes Bank at ₹15,000 crore. However, the Vodafone Idea FPO will supplant that as the the largest such FPO in India.
It has been reported that Vodafone Idea has secured commitments from anchor investors, including foreign and domestic institutions.
And most importantly, the Indian government, which owns a whopping 33% of Vodafone Idea after it fell on really bad times, has indicated its support for the share sale.
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The trouble that Vi is in
Needless to say, considering the fact that Vodafone Idea is a cash-strapped entity, the funds will play a critical role in providing the much needed liquidity injections.
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Importantly, Vodafone Idea still has quite a large subscriber base at 220.5 million in February, but it has been haemorrhaging subscribers over the last few years and that is not ending - it lost 1 million subscribers. Its debt burden alone is a mammoth s 2.1 lakh crore. And not just a debt burden, it has been racking up operational losses too.
