Vodafone Idea Plans ₹20,000 Crore FPO Next Week

Vodafone Idea is gearing up to raise ₹20,000 crore from the markets through a follow-on public offer (FPO) as soon as next week, according to three sources familiar with the discussions.

The company has appointed Axis Bank, Jeffries Group, and State Bank of India as lead bankers for managing the share sale. A price band is expected to be decided by early next week, likely at a discount to the current share price. On Thursday, Vodafone Idea’s shares closed 1.4% lower at ₹13.36 each.

Long-only investors are expected to participate as anchor investors in the FPO. The fundraise through the FPO follows previous attempts by the telecom provider to raise capital since September 2020.

Vodafone Idea’s shareholders have approved a ₹45,000-crore fundraising initiative, including a ₹20,000-crore equity-based capital infusion from existing investors. Following this, the company plans to raise debt, bringing the total funding to up to ₹45,000 crore. The fundraise is expected to be completed by the end of June.

The telecom sector, known for its high capital requirements, has faced challenges due to a lack of funding for Vodafone Idea over the past three years. The company, burdened with a debt of ₹2.1 trillion, has struggled to pay dues to vendors, estimated at around ₹10,000 crore. Meanwhile, competitors Bharti Airtel and Reliance Jio have advanced in rolling out 5G services in India.

Vodafone Idea’s CEO, Akshaya Moondra, has mentioned discussions with external investors in previous quarters, while promoter equity infusion remains an option.

The carrier’s board of directors will meet to consider issuing equity or convertible securities of up to ₹2,075 crore on a preferential basis to promoter group entities. Previously, promoters had provided ₹2,000 crore for paying the annual installment against 5G spectrum bought in 2022.