'Successful conclusion of VI FPO of Rs 18,000 crore marks turning point for the telecom industry': Birla

Speaking at the Vodafone Idea FPO ceremony held at the National Stock Exchange (NSE) on Thursday, April 25, Birla advocated for the presence of three private telecom companies in a nation of 1.4 billion people.
Aditya Birla Group Chairman Kumar Mangalam Birla.
Aditya Birla Group Chairman Kumar Mangalam Birla.

NEW DELHI: The successful conclusion of Vodafone Idea’s follow-on public offer (FPO) of Rs 18,000 crore, India’s largest FPO, marks a turning point for the telecom industry, said Kumar Mangalam Birla, chairman of Aditya Birla Group and promoter of Vodafone Idea Limited (VIL).

Speaking at the Vodafone Idea FPO ceremony held at the National Stock Exchange (NSE) on Thursday, April 25, Birla advocated for the presence of three private telecom companies in a nation of 1.4 billion people. Emphasizing the significance of a revitalized Vodafone Idea for India, he described the moment as the commencement of Vodafone Idea 2.0.

“The emphatic oversubscription of the FPO – with the overall book being subscribed 7 times and the institutional book being subscribed 19 times — demonstrates the tremendous potential of the India digital story and Vodafone Idea’s role in it,” said Birla.

Birla also mentioned that the robust engagement from both foreign and domestic investors is heartening. According to him, the full subscription of the retail portion is truly commendable, given the sheer scale of the offer.

India’s third largest telecom operator, Vodafone Idea Limited (VIL)’s Rs 18,000 crore FPO subscribed 6.56 times, with investor bid for 8,011.8 crore equity shares. This marks the largest FPO ever subscribed in India, surpassing previous records set by Yes Bank's Rs 15,000 crore and ONGC's Rs 10,542 crore offerings.

While talking about using the fund, Birla mentioned that the proceeds from this fund raise are earmarked for a significant capital expenditure cycle. He is confident that on the back of this fund raise and continued support from banks, Vodafone Idea will stage a smart turnaround.

  “Vodafone Idea, today, is not just a telecom company. It is a national asset — with 215 million users, about 8000 MHz spectrum and a network that spans Kashmir to Kanyakumari,” said Birla.

The debt-laden telco, Vodafone Idea, has been losing subscribers to its competitors due to poor investment in its infrastructure and its delayed launch of 5G services. While its competitors, Reliance Jio and Bharti Airtel, launched their 5G services in 2022, Vodafone Idea is still to launch commercial 5G services in the country.

The chairman of the Aditya Birla Group, Kumar Mangalam Birla, also mentioned that his group has been committed to this sector for over two and a half decades now. According to him, along with their partner, Vodafone Group, they have cumulatively invested around Rs. 1,70,000 crore in the Indian Telecom industry.

“Before this FPO, in the last 5 years, out of Rs.30,000 Cr raised by the company, more than 75% has come from the two promoter groups. The latest fund raise has also seen an investment of over Rs. 2,000 Cr from the Aditya Birla Group. This continued commitment stems from our belief in the promise of the India digital story,” said Birla.

The chairman of the Aditya Birla Group, Kumar Mangalam Birla, also thanked the government, including Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, and Telecom Minister Ashwini Vaishnaw, for the reform package aimed at transforming the entire telecom sector.

He said India's digital economy is booming, and robust telecom networks are crucial to support this growth. While Vodafone and Aditya Birla Group previously held a combined stake of around 50.3% in VIL, the Government of India now holds the largest stake at approximately 33.1%.

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