Vodafone Idea raises ₹5,400 crore from anchor investors for infrastructure expansion and 5G rollout

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Vodafone Idea, on Wednesday, said that it has successfully secured ₹5,400 crore from 74 anchor investors. Notable among these investors are GQG Partners, The Master Trust Bank of Japan, UBS, Morgan Stanley Investment Management, Citigroup Global Markets, Australian Super, Fidelity, Quant, and Motilal Oswal.

Allocating 491 crore shares at Rs 11 per share, the telecom company granted the highest share percentage, 26 percent, to GQG Partners, totalling Rs 1,345 crore. Fidelity Investments also made a substantial investment of about Rs 772 crore in the FPO. Additionally, Troo Capital and Australian Super joined in, committing Rs 331 crore and Rs 130 crore, respectively.

A significant portion, approximately 16.2 percent amounting to Rs 874 crore, was allocated to domestic mutual funds, with Motilal Oswal Midcap Fund leading with a Rs 500 crore investment.

This fundraising initiative precedes Vodafone Idea’s ambitious plan to raise Rs 18,000 crore through India’s largest follow-on public offering, set to commence on Thursday, April 18, with the offering concluding on April 22.

The capital raised from this FPO will be earmarked for strategic endeavours, including the establishment of new 5G sites, expansion of the existing 4G network, and deferral of spectrum payments, as outlined in its red herring prospectus (RHP). Of the total FPO proceeds, a substantial portion, Rs 12,750 crore, will be channeled into enhancing network infrastructure, including the setup of new 4G sites, expansion of existing ones, and establishment of new 5G sites.

In the coming fiscal years, Vodafone Idea intends to set up 10,000 new 5G sites in FY25 with a budget of Rs 2,600 crore, followed by 12,000 additional sites in FY26, with a budget of Rs 3,120 crore. The company aims to cover subscribers accounting for 40% of its revenue with 5G services within the next 24-30 months, with initial rollouts expected in select areas within 6-9 months of funding acquisition.₹

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow