NEW DELHI: US-based investment firm GQG Partners and the State Bank of India Mutual Fund are reportedly considering investing up to $800 million (`6,600 cr) in the upcoming Vodafone Idea Limited’s (VIL) follow-on public offering (FPO) of Rs 18,000 crore.
A report citing two persons in the know said GQG, run by India-born executive Rajiv Jain, plans to invest about $500 million, while SBI Mutual Fund is considering an investment of $200 million to $300 million. Both the firms are considering investments under the institutional quota.
Vodafone Idea, country’s third largest telco, in February 2024 announced its plan to raise funds of nearly Rs 45,000 crore through a combination of equity and debt. The telco on Friday (April 12, 2024) announced a follow-on public offering (FPO) of equity shares aggregating up to Rs 18,000 crore.
Vodafone Idea set the FPO price between Rs 10 and Rs 11 per share. The company, in an exchange filing said the higher end of the price band, Rs 11, represents a discount of about 26% compared to the recently approved preferential issue price to the promoter entity and a discount of about 15% compared to the last closing price.
The FPO is scheduled to open on April 18 and close on April 22. “The higher end of the price band i.e. Rs 11 is at a discount of 26% compared to recently approved preferential issue price to the promoter entity at Rs 14.87 and a discount of 15% compared to last closing price of Rs 12.95,” said the company.
Interested investors can participate by bidding for a minimum lot of 1,298 equity shares, with the minimum application amount calculated at Rs 14,278 for one lot at the upper end of the price band. Following this, investors can bid in multiples of 1,298 equity shares.
The debt-laden telco is trying to raise funds to improve its financial health and to stay competitive. Recently, it successfully raised Rs 2,075 crore by issuing preferential shares to Oriana Investments Pte Ltd, a promoter entity within the Aditya Birla Group, at Rs 14.87 per share, marking a 40% increase from the FPO floor price. It also sold equity shares to its vendor, American Tower Company (ATC), through the conversion of optionally convertible debentures (OCDs) worth Rs 1,440 crore.
ATC now holds a 2.87% stake in Vodafone Idea. Meanwhile, the telco’s net loss for the October-December quarter narrowed to Rs 6,986 crore’ from Rs 8,738 crore’ in the previous quarter.