Telecom Operator Vodafone-Idea has rubbished media reports that its rights issue which had concluded on April 24 had been undersubscribed, as few reports had claimed.
In a press release to the exchanges, Vodafone said “There are some incorrect media reports which mention that the Rights Issue is undersubscribed based only on ASBA application data available on the stock exchanges and ignoring the Non-ASBA applications.
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The Company would like to clarify that based on preliminary information received the total applications from ASBA and Non-ASBA have exceeded the total issue amount of INR 25,000 crore.”
The rights issue, the largest-ever by any company in the country, was priced at Rs12.50 a share and had opened on April 10.
The current market price of Idea Cellular is around Rs 17 a share. The promoter shareholders — Vodafone group and Aditya Birla Group said they will participate for an amount of up to Rs 20,000 crore in the Issue.
Malaysia’s Axiata Group Berhad has already decided not to participate in the rights issue, renouncing its shares entitlement in favour of investors through transactions on the BSE, reducing its stake in the company to roughly 2.6% from 8.1%.
Vodafone-Idea had got special dispensation from market regulator the Securities and Exchange Board of India or Sebi to increase its holding beyond 75%, the threshold set for maximum promoter holding for listed companies.
Vodafone Idea has a debt of Rs 1.1 trillion and says it will use proceedings from rights issue to meet its capex plan along with monetising its 11.5% stake in Indus Towers and fibre assets which is likely to raise Rs 15,000 crore.
The company plans to spend Rs 27,000 crore for capex in FY19 and FY20 combined, of which Rs 7,000 crore has already been deployed. Since December 2018, Vodafone Idea witnessed a loss of almost 13 million active customers, according to the latest TRAI subscription numbers.
Most analyst suspect that this fund raising may not be enough in the face of stiff competition from Reliance Jio and earnings performance of the company may remain under pressure.
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