Mumbai: Vodafone Idea\’s ₹5,400-crore offer of shares to anchor investors was fully subscribed on Tuesday, making it the third-largest anchor book in India after One 97 Communications and Life Insurance Corporation. Telecom minister Ashwini Vaishnaw and finance secretary TV Somanathan backed the fundraising efforts of the cash-strapped telco.
Foreign institutional investors such as GQG Partners, UBS, Norges, Ellerston Capital, Morgan Stanley Investment Management, AustralianSuper and Fidelity were among those that subscribed to the telco\’s anchor book. Domestic mutual funds like HDFC, Quant and Motilal Oswal were also among the anchor investors.
The cash-strapped telco though didn\’t give details of the investors or the price of the offering to anchor investors, at the time of going to press.
The Government of India, which is the largest shareholder in Vodafone Idea (Vi) with a 32% stake, Tuesday came out in full support of the carrier\’s fundraising efforts. The issue includes a follow-on public offer to raise ₹18,000 crore at ₹10-11 a share and a preferential allotment of ₹2,075 crore at ₹14.87 apiece to one of its founder entities. This will be followed by a ₹25,000 crore debt funding.
UK\’s Vodafone Group and the Aditya Birla Group are Vi\’s co-promoters.
Shares of the loss-making operator declined 1.82% to close at ₹12.92 on the BSE Tuesday. The share price has more than doubled in the last one year.
Vaishnav told ET that the government will support every effort made by the telco; while Somanathan, also speaking to ET, added that the government\’s aim is to support competition in the sector.
\”We are happy to see the company\’s capital investment plan which will be funded by the FPO. One of government\’s key policy goals is to support competition in the sector in the interest of consumers, which was reflected in the telecom package and capital infusion in BSNL,\” Somanathan said.
According to market experts, the strong anchor line-up means high net worth individuals as well as retail investors will gobble up the issue. \”We are definitely looking at a good subscription to the FPO,\” one Mumbai-based brokerage analyst said.
The government decision to convert the telco\’s liabilities into equity has brought strong investor confidence, which shall bring a turnaround to the company\’s much laggard funding initiatives, chief executive Akshaya Moondra said on Monday.
The current ₹18,000-crore follow-on share sale will see the government stake diluted to 24%, which could rise to a comfortable 32-33% if the Centre decides to convert some of the principal dues into more equity, he had added.
\”It is clear that investors are playing on short-term visibility because the issue enables Vi to launch 5G and arrest subscriber churn.
