Vodafone Idea to Open ~ Rs 18,000 Crore FPO on April 18

Vodafone Idea, India's third major telecom sector player, has announced a follow-on public offer (FPO) to raise up to INR 18, 000 funds.

The FPO is critical for the company's survival. By raising funds through equity, Vodafone Idea aims to strengthen its financial position.

FPO Details

• Offer Amount: The FPO aims to raise up to Rs 18,000 crore.
• FPO Dates: The FPO will open for subscription on April 18 and close on April 22.
• Floor Price: The floor price for the FPO is set at Rs 10 per share, with a cap price of Rs 11.
• Lead Managers: Jefferies, SBI Caps, and Axis Capital are enlisted as lead managers for the FPO.
• Anchor Bids Approval: The anchor investor offers will be approved on April 16.

A follow-on public offer (FPO) is a process by which a company, already listed on the stock exchange, issues new shares to investors or existing shareholders. In this case, Vodafone Idea aims to raise additional funds through the issuance of these shares. The company will also participate in road shows and interact with investors and analysts starting from April 15 until the closing of the offer.

Please note that the shares issued under the FPO will not be registered under the US Securities Act of 1933 and may not be offered or sold within the US, unless there is an exemption from registration requirements of the said act and other state securities laws.

The Follow-on Public Offering (FPO) by Vodafone Idea is a significant move aimed at raising capital for the cash-strapped telecom operator.Vodafone Idea has been facing intense competition in the Indian telecom sector, particularly from rivals like Bharti Airtel and Reliance Jio. The company has been grappling with a significant debt burden and operational losses, further exacerbated by regulatory issues.

As a result, Vodafone Idea's subscriber base and market share have declined.

The board of Vodafone Idea has already approved a preferential share issue to raise Rs 2,075 crore from an Aditya Birla Group (ABG) entity. This set the stage for a wider funding program.

The FPO is expected to bring in desperately needed capital to address liquidity challenges.

Vodafone Idea plans to utilize the proceeds from the equity and debt funding to — Expedite the rollout of its 5G network service within six to seven months of securing the fund's, and Expand its 4G coverage.

Larger rivals like Bharti Airtel and Reliance Jio have already launched their 5G services in most parts of the country.

Additionally, Vodafone Idea aims to raise an additional Rs 250 billion through debt, although specific details have not been provided

In summary, the FPO is a strategic move to address financial challenges, enhance network capabilities, and compete effectively in the dynamic telecom landscape.

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