Vodafone Idea raises Rs 5400 crore from nearly 60 anchor investors

Vodafone Idea has raised Rs 5,400 crore from 74 anchor investors, the company announced in a press statement on Wednesday. The investors include GQG Partners, The Master Trust Bank of Japan, UBS, Morgan Stanley Investment Management, Citigroup Global Markets, Australian Super, Fidelity, Quant, and Motilal Oswal.

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The telecom company allocated 491 crore shares to anchor investors at Rs 11 per share. The highest number of shares, or 26 percent of the total shares allocated to anchor investors, have been allocated to US-based GQG Partners. The shares are worth Rs 1,345 crore. Fidelity Investments invested about Rs 772 crore in the FPO. Troo Capital and Australian Super will also be investing Rs 331 crore and Rs 130 crore, respectively.

About 16.2 percent of the total allocation amounting to Rs 874 crore to anchor investors were allocated to five domestic mutual funds, led by Motilal Oswal Midcap Fund which invested Rs 500 crores.

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The third-ranked telecom operator plans to raise Rs 18,000 crore through India’s largest follow-on public offering, which will open on Thursday, April 18.

The public offer, at a price band of Rs 10-11, will conclude on April 22.

plans to spend the Rs 18,000 crore capital raised from its follow-on public offering (FPO) to set up new 5G sites, expand its 4G network, and defer spectrum payments, it said in its red herring prospectus (RHP).

Must Read | How Vodafone Idea plans to spend its Rs 18,000 cr FPO proceeds

Of the total FPO proceeds, the telco proposes to use Rs 12,750 crore to purchase equipment for expanding its network infrastructure by setting up new 4G sites, expanding the capacity of existing 4G sites, and setting up new 5G sites, as per the RHP.

The telco will spend Rs 5,720 crore of the Rs 12,750 crore earmarked for network expansion on setting up its 5G network.

In FY25, it plans to set up 10,000 new 5G sites with a spend of Rs 2,600 crore, and in FY26, it will set up 12,000 5G sites with a spend of Rs 3,120 crore.

In a press conference on Monday, Vodafone Idea’s management said that it intends to cover subscribers accounting for 40% of its revenue with 5G services in the next 24-30 months, adding that orders for 5G network equipment will start once it secures funding. It expects to roll out 5G services in select pockets within 6-9 months of the issue.

Analysts believe that the Rs 18,000 crore fundraising will improve Vodafone Idea’s competitiveness with rival telecom operators to some extent and lead to a sharp reduction in bank debt, allowing it to secure further funding from banks.

However, they cautioned they don’t expect Vodafone Idea to gain any meaningful market share from its peers.