Vodaone Idea raises about Rs 5,400 crore from anchor investors, closes anchor book allocation

New Delhi: Just ahead of its mega FPO opening to public investors, Vodafone Idea (VIL) has announced closure of its anchor book allocation, raising about Rs 5,400 crore from marquee global as well as domestic investors, according to a statutory filing by the telco.

This could be the third-largest anchor book after One 97 Communications and Life Insurance Corporation (LIC).

One 97 Communications and LIC had raised Rs 8,235 crore and Rs 5,627 crore in the anchor round, respectively.

The prominent line-up of investors who subscribed to the anchor book includes GQG Partners, UBS, Morgan Stanley India Investment Fund, Citigroup Global Markets Mauritius, Goldman Sachs and Fidelity, among others.

Vodafone Idea said its Capital Raising Committee has approved the allocation of 490.9 crore equity shares of the company to the anchor investors.

"The Capital Raising Committee of the Board of Directors of the company at its meeting held on April 16, 2024 in consultation with the Book Running Lead Managers to the issue has finalised allocation of 4,90,90,90,908 equity shares to anchor investors at anchor investor allocation price of Rs 11 per equity share (including share premium of Rs 1 per equity share)," the company said in a BSE filing.

The anchor book received interest from a large number of leading global as well as domestic investors, all at the top end of the price band, that is Rs 11 per equity share.

Of the total allocation to anchor investors, 79.52 crore stocks, or 16.2 per cent of the total, were allocated to five domestic mutual fund through a total of 11 schemes.

Cash-strapped Vodafone Idea has announced Rs 18,000 crore follow on public offer at a price band of Rs 10-11 per share, marking the biggest FPO in the country.

Prior to this, the largest FPO in the Indian market was a Rs 15,000 crore share-sale by YES Bank in 2020.

The fundraise would give the ailing telco the firepower to improve its positioning in the Indian telecom market, where it currently trails larger rivals such as Reliance Jio and Bharti Airtel, by a wide margin.

The funds will also help VIL shore up finances for the much-delayed 5G rollout and strengthening 4G services, and payment of vendor dues.

On April 6, the VIL Board approved raising Rs 2,075 crore from promoter Aditya Birla Group and increasing its authorised share capital to Rs 1 lakh crore.

Earlier this year, Vodafone Idea had outlined plans to raise Rs 45,000 crore through a mix of equity and debt as it looked to match services offered by rivals Reliance Jio and Bharti Airtel and arrest an alarming and prolonged subscriber churn.

VIL has also been fighting a desperate battle for survival, saddled with debt of Rs 2.1 lakh crore and quarterly losses.

According to Trai data, Vodafone Idea continued to bleed on the subscriber front. VIL lost 15.2 lakh wireless subscribers, plunging its mobile subscriber base to 22.15 crore in January, in sharp contrast to subscriber gains by Jio and Airtel.