The third-ranked telecommunications operator is gearing up to raise Rs 18,000 crore through India’s most extensive follow-on public offering, set to commence on Thursday, April 18. Vodafone Idea, in a press release on Wednesday, disclosed that it has secured Rs 5,400 crore from 74 anchor investors. Notable investors in this roster include GQG Partners, The Master Trust Bank of Japan, UBS, Morgan Stanley Investment Management, Citigroup Global Markets, Australian Super, Fidelity, Quant, and Motilal Oswal.
In this arrangement, the telecom giant has allotted 491 crore shares to anchor investors at a rate of Rs 11 per share. Of these, the lion’s share, constituting 26 percent of the total allocation to anchor investors, has been granted to US-based GQG Partners, amounting to Rs 1,345 crore. Fidelity Investments, on the other hand, has committed approximately Rs 772 crore to the FPO. Additionally, Troo Capital and Australian Super are set to invest Rs 331 crore and Rs 130 crore, respectively.
A significant portion of the allocation, about 16.2 percent totaling Rs 874 crore, has been designated to five domestic mutual funds. Leading this pack is the Motilal Oswal Midcap Fund, injecting Rs 500 crores into the endeavor.
The third-ranked telecommunications operator is gearing up to raise Rs 18,000 crore through what will be India’s most significant follow-on public offering. Scheduled to commence on Thursday, April 18, and concluding on April 22, the public offer comes with a price band of Rs 10-11.
According to its red herring prospectus (RHP), the telecom company plans to utilize the capital raised from this offering for several purposes. Primarily, it aims to allocate Rs 12,750 crore towards enhancing its network infrastructure. This includes setting up new 4G sites, expanding existing 4G capacity, and establishing new 5G sites. Of this amount, Rs 5,720 crore will be specifically dedicated to the development of its 5G network.
In the upcoming fiscal year FY25, the company intends to install 10,000 new 5G sites with an expenditure of Rs 2,600 crore. Following that, in FY26, it plans to add 12,000 5G sites, investing Rs 3,120 crore.
During a recent press conference, Vodafone Idea’s management outlined its strategy to cover subscribers representing 40% of its revenue with 5G services within the next 24-30 months. They also mentioned that orders for 5G network equipment will commence once funding is secured, with an expectation to roll out 5G services in select areas within 6-9 months post-issuance.
Analysts view this Rs 18,000 crore fundraising initiative as a significant step towards enhancing Vodafone Idea’s competitiveness among rival telecom operators. It’s anticipated that this influx of capital will substantially reduce bank debt, thereby facilitating the acquisition of further funding from financial institutions.
