MUMBAI: Vodafone Idea board has fixed the rights issue price at Rs 12.50 per share to raise up to Rs 25,000 crore, the company said in a regulatory filing.
The rights issue price is at a steep discount to the prevailing market price — Vodafone Idea shares closed at Rs 33 a share on Friday, up three per cent.
The rights issue is slated to open on April 10 and close on April 24. The board has also fixed rights entitlement at 87 equity shares for 38 equity shares held.
Promoter shareholders Vodafone Group and Aditya Birla Group confirmed their participation up to Rs 11,000 crore and Rs 7,250 crore, respectively, in excess of their current entitlement. They also reserve their right to subscribe to any unsubscribed portion of the rights issue.
“The company is progressing well on its stated strategy post-merger. With the accelerated integration of two businesses, the Company announced in November 2018 that the guided cost synergies would be achieved by FY2021, two years ahead of the initial target set at the time of the original merger announcement in March 2017,” it said.
Fresh funds infusion will be crucial for the company, as recently India Ratings had placed the company ratings on ‘Ratings Watch Negative’ due to delays in expected funds infusion from March 2019 to May 2019.
“The proceeds from the rights issue coupled with the monetisation of our stake in Indus will allow us to make the required investments in the business to achieve our strategic goals,” said Balesh Sharma, CEO Vodafone Idea Limited.
“We are moving faster than initially estimated on integration, and are well on track to deliver our synergy targets, the improving broadband coverage and capacity will enable us to offer a superior network experience to our customers as well as enhance our ability to add more broadband customers.” he added.
Second such bid of this year
This deal is the second major fundraising by an Indian telco this year after Bharti Airtel Limited announced a similar plan to raise $4.6 billion