“Vodafone Idea Prepares to Raise ₹18,000-20,000 Crore Through FPO Next Week”
Vodafone Idea, once a telecom giant in India, is now navigating troubled waters as it grapples with massive debts, operational losses, and fierce competition from rivals like Reliance Jio and Bharti Airtel. In a bid to address its financial challenges, the company is gearing up to launch a Follow-on Public Offer (FPO) with the aim of raising a substantial sum of ₹18,000-20,000 crore.
Vodafone Idea, once a telecom giant in India, is now navigating troubled waters as it grapples with massive debts, operational losses, and fierce competition from rivals like Reliance Jio and Bharti Airtel. In a bid to address its financial challenges, the company is gearing up to launch a Follow-on Public Offer (FPO) with the aim of raising a substantial sum of ₹18,000-20,000 crore.
The FPO, expected to roll out soon, is a critical move for Vodafone Idea, which has seen a significant downturn in its fortunes over the years. A recent announcement revealed that the company’s board has approved raising ₹2,075 crore from the Aditya Birla Group, marking a step towards securing much-needed liquidity. Shareholders’ approval for this capital raise is set to be sought on May 8, highlighting the urgency of the company’s financial situation.
Leading financial institutions such as Jefferies, SBI Caps, and Axis Capital are reported to be the lead managers for the FPO, signaling significant interest from the investment community. This FPO is poised to become the largest in India, surpassing the previous record set by Yes Bank at ₹15,000 crore.
One crucial aspect of the FPO is the support it has garnered from anchor investors, including both domestic and foreign institutions. Additionally, the Indian government, which holds a substantial 33% stake in Vodafone Idea, has indicated its backing for the share sale, further bolstering investor confidence.
The infusion of funds through the FPO is pivotal for Vodafone Idea’s survival and future operations. Despite challenges, the company still boasts a sizable subscriber base of 220.5 million as of February. However, it continues to face subscriber losses, highlighting the need for strategic financial interventions.
Vodafone Idea’s staggering debt burden of ₹2.1 lakh crore, coupled with operational losses, underscores the urgency of addressing its financial woes. The upcoming FPO represents a critical lifeline for the company, providing the necessary liquidity injections to navigate through turbulent market conditions and sustain its operations.
Sources By Agencies
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