Ahead of FPO, Vodafone Idea garners Rs 5,400 cr from anchor investors

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.

In a notification to the exchanges on Wednesday, VIL said it has allotted 490.9 crore shares to 74 funds at Rs 11 apiece, which is also the upper end of the price band.

This translated into a transaction size to Rs 5,400 crore.

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.

Those who were allotted shares include GQG Partners Emerging Markets Equity Fund, Fidelity, UBS Fund Management, Abu Dhabi Investment Authority, Australian Super, Troo Capital, Morgan Stanley, Citigroup Global Markets Mauritius, and Jupiter Fund Management.

Additionally, domestic investors, including Motilal Oswal Mutual Fund, HDFC Mutual Fund, SBI General Insurance and Quant Mutual Fund, were allocated shares in the anchor round.

The Rs 18,000-crore FPO of Vodafone Idea will open for public subscription on April 18 and conclude on April 22, marking the biggest FPO in the country.

The price band has been set at Rs 10-11 per share.

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.