Vodafone Idea raises ₹5,400 crore from anchor investors led by GQG

Vodafone Idea has raised about ₹5,400 crore in its follow-on public offering from anchor investors including GQG Partners, Fidelity Investments, UBS Fund Management, Jupiter Fund Management, and Australian Super. 

Among domestic investors in the FPO were India Infoline, Motilal Oswal, HDFC Mutual Fund, SBI General Insurance, and Quant.

In a statement to the stock exchanges early Wednesday, India's No.3 carrier said it had finalised the allocation of about 4.9 billion shares to anchor investors at ₹11 apiece. 

US-based GQG Partners has been allocated the highest number of shares, worth ₹1,345 crore, while Fidelity Investments has invested about ₹772 crore in Vodafone Idea's FPO. Troo Capital and Australian Super will be investing ₹331 crore and ₹130 crore, respectively.

Of the total shares, 16.20% amounting to ₹874 crore were allocated to five domestic mutual funds, led by Motilal Oswal Midcap Fund, which invested ₹500 crore.

Executives of the third-largest telecom services provider in the country have been doing roadshows since Monday following the announcement of ₹18,000 crore follow-on public offer, the largest FPO by an Indian company to date.

“The anchor investor sentiment is an indication of the demand and a pre-cursor for the interest it may see among retail investors,” a senior executive said, asking not to be named. 

The FPO has been priced at ₹10-11 per share and will be open for retail investors from 18 April to 22 April. The minimum bid lot for subscription has been fixed at 1,298 equity shares.

Proceeds from the share offer are crucial for the telco, which plans to roll out 5G services in six to nine months. The carrier remains the only private company to not have 5G services, unlike Airtel and Reliance Jio.

The cash-strapped telco will use ₹12,750 crore from the FPO for network expansion till FY26, of which ₹5,720 crore will be for setting up 22,000 5G sites and the rest for setting up 26,000 new 4G sites, upgrading existing 4G sites, and for general corporate purposes. 

Vodafone Idea also owes ₹2,170 crore to the government in FY25 as an installment for spectrum bought in a previous auction.

The Indian government, the single-largest shareholder in Vodafone Idea with a 32% ownership, will see its stake in the telco drop to about 24% following the FPO. Analysts at BofA Securities said promoter shareholding in the company could fall to about 38% from 50.3% now.