Vodafone Idea launches $2.16 billion share sale  


The sale is set to be the biggest follow-on public offering (FPO) in India’s history 


Vodafone Idea has announced that it is set to raise up to 180 billion rupees ($2.16 billion) through the country’s biggestFPO, a process by which a company already listed on the stock exchange issues additional shares in order to raise capital. 

The FPO will take place from April 18 to April 22, with a share price of 10 rupees ($0.12) per share. 

After the share sale announcement, Vodafone Idea’ share price dropped 2.3% at 12.65 rupees ($0.15). 

Vodafone Idea is India’s third largest mobile operator by subscriber numbers. For years, the company has struggled to compete with India’s two largest operators, Bharti Artel and Reliance Jio, with the latter bursting onto the scene in 2016, initiating an intense price war. This tough competition has left Vodafone Idea deep in debt and struggling to compete for market share, which reached a low of 18.93% in February this year.  

Since it was launched in 2018 from a merger of Vodafone’s Indian unit and Aditya Birla Group’s Idea Cellular, Vodafone Idea has recorded losses in every quarter. 

In February last year, the Indian government became the firm’s largest shareholder (33.1%), in a deal that saw the government convert the interest that Idea owed related to spectrum and adjusted gross revenue (AGR) payments, into equity. 

The company’s enormous debt has seen it struggle to invest in network upgrades, leaving it as India’s only telco to not yet launch 5G services.  

The operators first commercial 5G offerings are expected to be introduced later this year.  

“Having made large investments and no monetization happening, I think the industry does need to see some movement towards monetization,” said CEO Akshaya Moondra in an earnings call in January 

“Let’s say if we are launching 5G probably in the next 6-7 months’ time then we will have a better idea of what is happening on the monetization front. After funding is there, we will need some time to roll out. Let’s say 6-7 months,” he continued. 

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