The country\u2019s largest telecom operator Vodafone Idea\u2019s board on Wednesday approved raising of nearly Rs 25,000 crore from its shareholders through rights issue by offering fresh equity at a steep 61 per cent discount over prevailing market rate.<\/p>\n\n\n\n
The issue of 2,000 crore new shares by Vodafone Idea at Rs 12.50 apiece will more than triple its outstanding shares to 2,873.53 crore.In the issue, which will run between April 10 and April 24, existing shareholders will be able to buy 87 shares for every 38 shares held at an issue price of Rs 12.50 a share, the company said in a statement.<\/p>\n\n\n\n
The rights issue is expected to bring a whopping Rs 25,000 crore to the company\u2019s coffers at a time when the telecom players are injecting massive funds to boost pan-India 4G coverage, prepping up for 5G and positioning themselves to combat sustained tariff offensive from the deep-pocketed Reliance Jio Info-com.
\nThe move will also enable the company to pare debt, which as on December 31, 2018 stood at Rs 1,23,660 crore.<\/p>\n\n\n\n
Some market watchers believe that minority shareholders may find the issue price of Rs 12.50 a share attractive as it comes at a discount of about 61 per cent to the stock\u2019s closing price on Tuesday.<\/p>\n\n\n\n
The promoter shareholders have confirmed their participation of up to Rs 11,000 crore and up to Rs 7,250 crore, respectively. The balance Rs 6,750 crore will come from other equity holders.<\/p>\n\n\n\n
\u201cFurthermore, certain promoter shareholders have also indicated that, in case the rights issue is undersubscribed, they reserve the right to subscribe to part or whole amount of the unsubscribed portion, subject to the applicable laws,\u201d the statement said.<\/p>\n\n\n\n
Vodafone Idea CEO Balesh Sharma exuded confidence that the company is well placed to exploit the growth opportunities ahead of it, riding on strong assets such as two leading brands Idea and Vodafone, the largest spectrum portfolio and a well invested network.<\/p>\n\n\n\n
\u201cWe 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,\u201d Sharma said.<\/p>\n\n\n\n
After the details of the rights issue were announced on Wednesday, Vodafone Idea stock tumbled 7 per cent on the BSE, but later erased its losses closing 3.13 per cent higher at Rs 33 per share.<\/p>\n\n\n\n
The proposed rights issue will arm Vodafone Idea with the firepower to take on market competition intensified by Reliance Jio that has sustained an aggressive tariff war in the telecom sector.<\/p>\n\n\n\n
British telecom major Vodafone holds 45.1 per cent stake in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group controls 26 per cent and Idea shareholders own 28.9 per cent.<\/p>\n\n\n\n
The mega merger was announced a few months after the entry of Reliance Jio, whose aggressive pricing and freebies impacted the financials of the entire industry, which has even seen bankruptcies and asset sell-offs.<\/p>\n\n\n\n
Rajan S Mathews, Director General of industry body COAI said that Vodafone Idea\u2019s rights issue at a \u201crealistic pricing\u201d is a strong signal from the promoters that they are committed to the sector and are bullish on its long term viability.<\/p>\n","protected":false},"excerpt":{"rendered":"
The country\u2019s largest telecom operator Vodafone Idea\u2019s board on Wednesday approved raising of nearly Rs 25,000 crore from its shareholders through rights issue by offering fresh equity at a steep 61 per cent discount over prevailing market rate. The issue of 2,000 crore new shares by Vodafone Idea at Rs 12.50 apiece will more than […]<\/p>\n","protected":false},"author":1,"featured_media":57466,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[410],"tags":[],"class_list":["post-57465","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/57465","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/comments?post=57465"}],"version-history":[{"count":1,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/57465\/revisions"}],"predecessor-version":[{"id":57467,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/posts\/57465\/revisions\/57467"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media\/57466"}],"wp:attachment":[{"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/media?parent=57465"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/categories?post=57465"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blastingskyhawk.com\/english\/wp-json\/wp\/v2\/tags?post=57465"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}