- By Aditya Pratap Singh
- Wed, 17 Apr 2024 10:44 AM (IST)
- Source:JND
Vodafone Idea Fund Raise: Vodafone Idea has allotted 4.9 billion shares at Rs 11 per share (top end of the price band) to anchor investors to raise Rs 5,400 crore. The shares were allotted in a total of 74 distinct plans in the anchor category. US-based GQG Partners took subscriptions worth Rs 1,347 crore, which is around one-quarter of the anchor category.
Aside from these, other large customers included Fidelity, Stichting, Redwheel, Motilal Oswal Mutual Fund, and Truo Capital. The allotment decision was reached after the meeting of Vodafone Idea’s “capital raising committee” finished at 11:45 p.m. on Tuesday night.
FPO To Open On Thursday
Anchor allotment is carried out a day before the opening of the Follow On Public Offering (FPO). Since Wednesday is a market holiday, VIL’s Rs 18,000 crore FPO, India’s largest ever, will open for subscription on Thursday and close on Monday. The anchor allotment was the third biggest ever after Paytm (Rs 8,325 crore) and LIC (Rs 5,627 crore). Of the whole anchor book, 16.2 per cent was allotted to five home-grown mutual funds (MFs) through a total of 11 schemes. These are MFHDFC, Motilal Oswal, Quant, Baroda BNP, and 360One.
Also Read: Apple's iPhone Exports From India Almost Doubled To USD 12.1 Billion In FY24: Trade Vision
Good response from anchor investors can change sentiment of FPO
Market analysts say that strong demand in the anchor category will modify sentiment towards troubled telecommunications company’s FPO. The telecom company has set the price band for the FPO at Rs. 10-11 per share. VIL shares closed at Rs. 12.9, which was 1.9 percent lower than its previous close. The upper end of the price band is around 15 percent lower than the present stock price.
Of the Rs 18,000 crore, VIL plans to spend Rs 12,750 crore on increasing capacity of existing and new 4G sites and establishment of new 5G sites. The deferred payment for spectrum will cost DoT and GST departments roughly Rs 2,175 crore. The company is in losses.
Axis Capital, Jefferies India and SBI Capital are the investment banks managing the FPO.The FPO will raise the company’s paid-up capital to around Rs. 65,000 crore and the number of outstanding equity shares to 65,000 million, which will be the highest among listed companies in the country. Due to this, a rise in its share price can be seen in the long term.
Vodafone is in loss for last 8 years
At present, the promoters hold 48.75 per cent stake in VIL. After the FPO, the promoter's stake will be reduced to 36.87 per cent.
The mobile operator has been running in losses for the last eight years and recorded a net loss of Rs 29,371 crore and a cash loss of Rs 6,251 crore in the financial year 2022-23. In comparison, it reported a net loss of Rs 23,563 crore and a cash loss of Rs 6,681 crore during the April-December 2023 period (9MFY24).
