Vodafone Idea FPO subscribed 26% on day 1
Rajiv Jain's GQG Partners, through several of its funds, has invested nearly Rs 1,350 crore in Vi's anchor book.
Rajiv Jain's GQG Partners, through several of its funds, has invested nearly Rs 1,350 crore in Vi's anchor book.
"FPO proceeds will not be utilised to pay any promoter or promoter group entity. As such, only a maximum of around 17% of the FPO proceeds are for general corporate purposes. We will use it in the best interest of the business and that use could also be capex. Broadly, we hope to pay vendors with the cash flows that we generate from operations, over a period of time."
The public offering, which closes on April 22, has been priced in the band of ₹10-11 apiece, which is 17-29% below the stock's Tuesday closing price of ₹12.9. Financial markets were shut on Wednesday for Ram Navami.
Vi, on Tuesday, raised Rs 5,400 crore from 74 anchor investors, making it the third-largest anchor book after One 97 Communications and Life Insurance Corporation. Vi plans to raise as much as Rs 18,000 crore through India’s largest follow-on public offering (FPO), which will open on April 18 and close on April 22.
The shares will be issued at Rs 14.87 apiece to Oriana Investments Pte Ltd, Vodafone Idea said in a notice to the stock exchange on Saturday. The stock issuance will be at a premium to the closing price of Rs13.32 on the BSE on Friday, which gave the company a market cap of Rs64,841.52 crore. The relevant date for determining the floor price of the preferential issue will be April 8.
Under the terms of the renewed agreement, IBM is likely to manage, maintain and operate Vi's IT infrastructure and offer tech solutions around cloud computing, customer experience besides undertaking modernisation and intelligent automation of the telco's data centres using AI.
Cloud Play is priced at Rs 100 per month (Rs 104 recharge for prepaid users). Users can sample the service for free as an introductory offer before purchasing the subscription pack, Vi said in a media statement.
The meeting "is scheduled to be held on Saturday, 6th April 2024, inter-alia, to consider proposal for issuance of Equity Shares and/or Convertible Securities on a preferential basis," Vi said in an exchange filing.
Separately, in an investor presentation, VIL said it has completed the minimum roll out requirement for 5G services in 4 telecom circles, and the company has a target to cover 40 per cent of revenues population coverage with 5G in the first 24-30 months.
Facing mounting financial losses and subscriber attrition due to the lack of expansion of 4G services and launch of next generation technology services 5G, the success of the new strategy is imperative for Vodafone Idea to remain afloat in the competitive landscape.
At 33%, govt remains the largest shareholder in the company, ahead of industrialist Kumar Mangalam Birla's Aditya Birla Group and Vodafone Plc of the UK. However, govt feels that the "time has yet not come to do full or partial divestment" of its stake, especially as the funds that the company will get are to be used for launch of 5G services and pare debt.