NEW DELHI: Foreign investors are likely to invest around ₹18,000 crore in the rights issue of Vodafone Idea, which includes a major chunk from promoter Vodafone Group, sources said.
The company's ₹25,000 crore rights issue will open on 10 April.
"Vodafone Idea had approached government for FDI approval. The proposal has received clearance from Cabinet. It is expected that ₹18,000 crore during the rights issue will come from foreign sources," an official said.
Any foreign funding above ₹5,000 crore requires Cabinet approval. The Cabinet had on 28 February cleared the company's FDI proposal.
The promoter shareholders -- Vodafone Group and Aditya Birla Group -- have reiterated to the board that they intend to contribute up to ₹11,000 crore and up to ₹7,250 crore respectively, amounting to total of ₹18,250 crore, as part of the rights issue.
While Vodafone Group's entire funding will be considered as foreign investment in the rights issue, Aditya Birla Group may also route funds from its foreign entities, sources said.
The board of directors of Vodafone Idea on 20 March cleared the planned ₹25,000-crore rights issue at a price of ₹12.50 per equity share, a steep 61 per cent discount to the prevailing market rate.
In a regulatory filing, the company had said the rights entitlement ratio has been fixed at 87 equity shares for every 38 shares held by eligible shareholders of the company on the record date, that is 2 April, 2019.
According to Citi Research, the successful completion of the capital raise would be positive for the company as it could strengthen the balance sheet, remove going concern risks, and help enhance network capacity and coverage.
This story has been published from a wire agency feed without modifications to the text.