The rights issue of Vodafone Idea, the country’s largest telecom operator by subscribers, has been oversubscribed by a little over 100 per cent and crossed ₹25,000 crore in value terms. According to data from the registrar, the issue has been subscribed 1.07 times.
“The company would like to clarify that based on preliminary information received, the total applications from ASBA and non-ASBA have exceeded the total issue amount of ₹25,000 crore,” Vodafone Idea said in a BSE filing.
According to sources, the issue received bids worth ₹26,950 crore, compared with ₹25,000 crore on offer. The non-promoter portion of the issue received bids worth ₹8,700 crore.
“Based on the preliminary data available with us, the rights issue has been fully subscribed with strong demand from both institutional and retail investors,” Raj Balakrishnan, Co-Head of India Investment Banking at BofA Merrill Lynch told
Vodafone Idea’s ₹25,000-crore rights issue, the largest in the country, opened on April 10 and closed on April 24, wherein the promoters (Vodafone Group and Aditya Birla Group) were to infuse up to ₹18,250 crore.
The issue comprised up to 2,000 crore shares at ₹12.5 a share, totalling ₹25,000 crore for shareholders of record date April 2, 2019.
“The Vodafone Group will infuse up to ₹11,000 crore and Aditya Birla Group will put in up to ₹7,250 crore, which is 73 per cent of the rights issue,” Akshaya Moondra, Chief Financial Officer at Vodafone Idea told BusinessLine earlier on April 9.
Kotak Mahindra Capital Company, DSP Merrill Lynch, Morgan Stanley India Company, HDFC Bank and SBI Capital Markets are the lead managers to the rights issue.
War chest for integration
The company intends to build a war chest to accelerate integration of its operations (Idea and Vodafone), prioritise investments in profitable areas and focus on increasing average revenue per user (a financial metric for telecom companies) and focus on enlarging the business.
Vodafone India and Idea Cellular, which had announced their merger last year, have already integrated nine of the total 22 radio networks.
In April, Bharti Airtel’s board also approved a rights issue of ₹25,000 crore and raising ₹7,000 crore through foreign currency perpetual bond issues.
The issue comprised up to 2,000 crore shares at ₹12.5 a share, totalling ₹25,000 crore for shareholders of record date April 2