MUMBAI, 14^th APRIL, 2024 (GPN): Vodafone Idea (Vi) India’s third major telecom sector player Rs 18,000-crore follow-on public offer (FPO) will open for subscription on April 18, the telecom major said on April 12. The floor price for the issue has been fixed at Rs 10 a share, while the cap has been set at Rs 11.

The offer will close on April 22. The anchor bids will be approved on April 16, the company said in an exchange filing.

GPN earlier reported Vi was gearing up to launch an FPO to raise Rs 18,000-20,000 crore. The debt-laden company has enlisted Jefferies, SBI Caps and Axis Capital as lead managers for the FPO, the largest offerings of its kind in India.

Investors can bid for a minimum bid lot of 1,298 equity shares. The minimum application amount, based on the upper end of the price band comes up to Rs 14,278 for one lot of shares in the FPO. Investors can then bid in multiples of 1,298 equity shares thereafter.

The FPO comes after the company’s board on February 27 approved raising up to Rs 20,000 crore via equity.

The company recently raised Rs 2,075 crore through the issue of preferential shares to one of its promoter entities – Oriana Investments Pte Ltd, which belongs to the Aditya Birla Group.

The shares were issued at Rs 14.87 apiece, up 40 percent from the FPO floor price.

Apart from the Rs 20,000 crore equity fund raise, the telecom operator is also said to be in talks with banks to tie up debt funding, taking the total fund raise to Rs 45,000 crore as a combination of equity and debt.

In a recent note, brokerage CLSA said Vodafone Idea shares can fall to Rs 5 after it lost as 17 million subscribers over the past 12 months.

Beyond its capex and 5G rollout, Vodafone Idea may face a financial crunch in fiscal year 2026 when annual spectrum and AGR payments worth up to $4 billion will fall due, unless the government converts debt principal to equity at the end of the moratorium, it said.

The brokerage maintained its “sell” rating on the stock.

Shares of Vodafone Idea have doubled over the last 12 months, though the stock has corrected 30 percent from its recent peak.

For April 12 session, the stock is in the F&O ban, which means no new positions can be created in the stock.

Yes Bank’s Rs 15,000 crore-FPO has been the largest such share sale in the Indian market, so far.

Adani Enterprises Rs 20,000-crore FPO in January 2023 would topped it but the Gautam Adani flagship company called off the offer after the Hindenburg Research report alleged several governance lapses at the Adani group. ENDS / GPN