Vi enlists Axis Bank, Jefferies for $2.4 billion share sale

Vodafone Idea Ltd. has appointed the investment banking units of Axis Bank Ltd. and Jefferies Financial Group Inc. for its $2.4 billion share sale, according to people familiar with the matter, as the founders — Vodafone Group Plc and the Aditya Birla Group — seek to turnaround the unprofitable joint venture.

The beleaguered Indian wireless carrier is also in advanced talks with other investment bankers for the follow-on public offer that should be rolled out in coming months, the people said, asking not to be identified because the information is private. Vodafone Idea got shareholder approval this week to raise as much as 200 billion rupees ($2.4 billion) via shares or equity-linked instruments.

A price of around 12 rupees per share is being considered though this could change, one of the people said, indicating a 11% discount to Wednesday’s close. Mumbai-based Vodafone Idea will also consider a preferential issue of as much as 20.75 billion rupees to founder-linked firms on April 6, it said in an exchange filing Wednesday. This infusion of funds is expected from firms linked to billionaire Kumar Mangalam Birla, who chairs the Aditya Birla Group, two of the people said.

A representative for Vodafone Idea didn’t immediately respond to an email seeking comments while spokespeople for Axis Bank and Jefferies declined to comment.

Years of Effort
A successful fundraising by Vodafone Idea would cap years of effort — it’s been trying to raise money since at least September 2020. Part of the Birla’s cement-to-clothing conglomerate, it hasn’t reported an annual profit since 2016 and has lost subscribers to stronger rivals Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd.

In 2022, Vodafone Idea converted the dues it couldn’t pay to the Indian government into a 36% equity stake — a move that rattled investors and made the government the company’s largest shareholder overnight. The fundraising comes a few months after the federal government said that it won’t allow a duopoly to emerge in the Indian telecom sector, signaling that Vodafone Idea won’t go under.

The 200-billion-rupee fundraising, which was approved by the company board in end-February, was seen as a positive start by brokerages to improve the company’s 4g and 5G services but they added that more needed to to be done.

Vodafone Idea shares rose as much as 4.1% on Thursday in Mumbai trading, paring this year’s decline to 17.3%. Bloomberg