Sun. May 26th, 2024
Vodafone Idea FPOFILE PHOTO: REUTERS/Danish Siddiqui

Beleaguered telecom company Vodafone Idea on April 12 said it is coming up with a Follow-on Public Offering (FPO) of equity shares of up to ₹18,000 crore to which the board has agreed.

The follow-on offer will open on April 18 and culminate on April 22. The minimum price for the offer has been set at ₹10, with ₹11 per equity share as the maximum price.

“The Board of Directors of the company, at its meeting held on April 11, 2024, approved Further Public Offering (FPO) of equity shares, aggregating up to ₹18,000 crore. The capital raising committee in its meeting held today on April 12, 2024, approved the price band for the FPO issuance,” the company said in a BSE filing.

FPO enables companies to pull in the necessary capital supplemental to run operations, finance investments, or pay off debts. Already listed companies on stock exchanges issue additional shares via FPO. It is a successor of initial public offerings, therefore called secondary offerings.

The telecom company has fixed the ceiling price band of ₹11 at a discount of about 26% of the recently approved preferential issue price to the promoter entity at ₹14.87 and a discount of about 15% to the last closing price at ₹12.95. On Friday, the shares closed at ₹ 13.15, up 1.52% from the previous close.

To materialize rolling out 5G service and to throttle competitors ever-expanding market share, the board at the start of April convened an extraordinary general meeting at which shareholders approved raising ₹ 20,000 crore. Vodafone Idea, in the further course, is reportedly to raise funds via debt, with the total funding reckoning at ₹45,000 crore. The company would close its fundraising by June.

On Saturday, the telco approved allotting preferential shares worth ₹2,075 crore to Oriana Investments. In an attempt to fundamentally bolster the company’s finances, VI increased the authorized share capital to ₹1 trillion, bifurcated into ₹95,000 crore share capital and ₹5,000 crore preference share capital. Currently, the company has a share capital of ₹75,000 crores, ₹70,000 crore share capital, and ₹5,000 crore preference share capital.

By Harshita Sharma

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