NEW DELHI: Telecom service provider Vodafone Idea Limited (VIL) is confident that its upcoming follow-on public offer (FPO) of Rs 18,000 crore will be fully subscribed. Akshaya Moondra, its Chief Executive Officer (CEO), while addressing press, said the company has allocated Rs 5720 crore from the proceeds of FPO towards 5G rollout in the country.
He also mentioned that Vodafone Idea expects to rollout 5G in the next six to nine months, without giving the exact date.
“We have engaged with our vendors on 5G for quite some time. Of course, as you all understand any ordering is dependent on funding. So once the funding is there, our effort will be to expedite the ordering as quickly as possible. A lot of groundwork has happened, the trials have happened,” said Moondra.
In February 2024, Vodafone Idea Limited (VIL) announced plans to raise a total of Rs 45,000 crore through a combination of equity and debt. This included the recently announced Follow-On Public Offer (FPO) for equity shares, valued at up to Rs 18,000 crore.
The FPO price is set between Rs 10 and Rs 11 per share, with an opening date of April 18th and a closing date of April 22nd. The company expressed confidence in attracting strong investor interest, particularly after the reveal of the anchor investor list scheduled for the following day.
On being asked why the company started the FPO process this year, Moondra said there's a right time and place for everything. As Vodafone Idea was unable to pay its Adjusted Gross Revenue (AGR) to the government, the latter converted it into equity in February 2024. Moondra explained that the government conversion was a crucial factor for investor confidence.
"Since then, we've been actively engaging with investors," he said. "Previously, there was investor apprehension. Now, we're confident about raising the funds. There's a right time and place for everything."
Moondra also highlighted that despite subscriber loss, the company's Average Revenue Per User (ARPU) growth remains competitive with rivals. He attributed the lower ARPU to a higher proportion of 2G customers compared to competitors like Bharti Airtel and Reliance Jio.
"Our tariffs are market-aligned, in fact, the highest. So, lower ARPU isn't due to pricing," he clarified.
VIL further emphasized that new customer acquisition remains higher than its market share, achieved with limited capital expenditure. The primary reason for net subscriber loss is a lack of 4G coverage. The company aims to improve its 4G network with the FPO funds and address subscriber loss. "That's what this investment will tackle," said Moondra.
The telco also clarified that it won't be actively bidding in the upcoming spectrum auction to be held by DoT (Department of Telecommunication). VIL CEO Akshaya Moondra explained that the company has sufficient spectrum to meet its current requirements.
“Therefore, we don't see a significant need for acquiring additional spectrum beyond license renewals at this point in time… VIL's existing spectrum portfolio is adequate for its needs,” added Moondra.