Vodafone Idea is planning to launch a Follow-on Public Offer (FPO) soon to deal with its financial challenges, including debt and losses.
Once a leading telecom provider, Vodafone Idea has fallen behind in the industry, now trailing behind Reliance Jio and Bharti Airtel. The company is looking to issue an FPO soon, possibly next week, aiming to raise between ₹18,000 to ₹20,000 crore. This move comes shortly after the announcement that the company will raise ₹2,075 crore from the Aditya Birla Group by increasing its authorized share capital to ₹1 lakh crore, pending shareholder approval on May 8. This will involve issuing equity shares at ₹14.87 each.
The FPO is a significant step for Vodafone Idea and is expected to be managed by Jefferies, SBI Caps, and Axis Capital. This FPO is notable as it’s set to be the largest in India, surpassing Yes Bank’s ₹15,000 crore issue.
Vodafone Idea has reportedly secured support from both foreign and domestic investors for this FPO. Moreover, the Indian government, which owns a 33% stake in the company, has shown its support for this share sale.
The funds from this FPO are crucial for Vodafone Idea, providing the necessary financial support the company desperately needs. Despite a subscriber base of 220.5 million as of February, the company has been losing customers and grappling with a substantial debt of ₹2.1 lakh crore, alongside ongoing operational losses.
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