Vi raises ₹5,400 crore from anchor investors prior to ₹18,000 crore FPO

Vodafone Idea has raised ₹5,400 crore from anchor investors including GQG Partners, Fidelity Investments, UBS Fund Management, Jupiter Fund Management, and Australian Super, besides Indian investors such as India Infoline, Motilal Oswal, HDFC Mutual Fund, SBI General Insurance and Quant.

The share-worth allocations so far are estimated as:

• GQG Partners: Rs ₹1,345 crore
• Fidelity Investments: ₹772 crore
• Troo Capital: ₹331 crore
• Australian Super: ₹130 crore,
• Motilal Oswal Midcap Fund: ₹500 crore.

4 other Mutual Funds including HDFC Large, Mid cap fund and The Baroda BNP Paribas Multi Cap Fund combined: ₹374 crore.

The telco in an exchange filing said that it has finalised the allocation of 491 crore shares to anchor investors at ₹11 apiece.

Vi plans to raise Rs 18,000 crore through the follow-on public offering (FPO). Axis Capital, Jefferies, and SBI Capital are the bankers to the public offer. The FPO will open for retail investors from April 18-22. The minimum bid lot for subscription has been fixed at 1,298 equity shares. The company has reserved 50 per cent of the FPO for the Qualified Institutional Buyers (QIB), 15 per cent for Non-Institutional Investors (NII), and the remaining 35 per cent for retail investors

VI has announced that it will spend ₹12750 crore on network expansion till FY26, of which ₹5,720 crore will be used to set up 22,000 5G sites and the rest for setting up 26,000 new 4G sites, upgrading existing 4G sites and for general corporate purposes.

The telco owes ₹2170 crore to the government in FY25 as an instalment for spectrum bought in a previous auction, and proceeds of the FPO will be used for this payment as well.

Goldman Sachs recently estimated that in the absence of headline rate increases, Vi requires Rs 65,000-83,000 crore of fresh capital over the next two years to build a mobile broadband network.

The telco may still face a cash shortfall in the second half of FY26 once the ongoing moratorium on the government’s AGR and spectrum repayments ends unless the Centre exercises the option to convert these dues into equity, said Citi. The AGR dues amount to Rs 70,000 crore. Akshaya Moondra, CEO, Vi says there is enough headroom for the government to convert its debt to equity, and there is still an 18-month moratorium on AGR dues.

Both, the government and the promoters will see dilution in shareholding post the FPO. While the government’s shareholding will go down from 33 percent to 24 percent if the FPO is fully realised, promoters’ share will go down from 48.9 percent in March 2024 to 37.3-38.2 percent, according to an analysis by Bank of America.

CT Bureau