Telecom major Vodafone-Idea (VI), facing a financial crisis, plans to launch a follow-on public offer (FPO) next week. According to a Moneycontrol report, this FPO of the company could be worth Rs 18,000 to 20,000 crores.
Lead managers for the Vodafone-Idea FPO: Jefferies, SBI Caps and Axis Capital
The lead managers for this FPO will be Jefferies, SBI Caps, and Axis Capital. According to sources, no bank is underwriting the matter.
The objective of the Vodafone-Idea FPO: To increase liquidity
Domestic and foreign anchor investors will also invest in this FPO of VI. It means that FPOs can get good support initially. Increasing liquidity is the main objective of the money raised through this FPO.
Profitable returns: Last year VI shares returned 112% to investors
Shares of Vodafone-Idea closed at Rs 12.90 on Tuesday. The market cap of the company is Rs 64.80 thousand crores. The company’s shares have returned 112% to its investors last year.
Aditya Birla Group to raise ₹2,075
It was announced earlier on Saturday that the Aditya Birla Group has approved raising Rs 2075 crore by increasing the authorised share capital to Rs 1 lakh cr. For this, the company may seek shareholders’ approval on May 8. The offer consists of 1,395,427,034 equity shares at ₹14.87 per share.
Vodafone Idea FPO
According to experts, this FPO could be a lifeline for Vi. Until now, Yes Bank had the largest issue of Rs 15,000 crore. But Vodafone Idea FPO will replace it by becoming the largest FPO in India. Vodafone Idea has reportedly secured commitments from anchor investors, including foreign and domestic institutions.
Possibility of ease of way
Most importantly, the Indian government has supported the share sale. Even in bad times, the government owns a massive 33% stake in Vodafone Idea. This FPO will provide the required liquidity to the company facing the crisis. Vodafone Idea also had a gigantic subscriber base of 220.5 million in February but has been losing ground over the past few years.
Board approves the increase in the authorised share capital of the company
VI had also said that its board has approved raising the authorized share capital of the company to Rs 1 lakh crore from the current Rs 75,000 crore. Which includes equity share capital of Rs 70,000 crore and preference share capital of Rs 5,000 crore.
The company had said that under the proposed changes, the increased authorised share capital would be Rs. 95,000 crore equity share capital and Rs. 5,000 crore will be divided into preference share capital. VI also said that shareholders’ approval will be sought for these proposals in the proposed general meeting on May 8.
