A woman uses a mobile phone as she sits inside taxi in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Vodafone Idea Promoters Contribute Rs 17,920 Crore To Rights Issue Following Over-Subscription

Promoters of Vodafone Idea Ltd. contributed Rs 17,920 crore to its Rs 25,000-crore rights issue compared to their commitment of Rs 18,250 crore, following over-subscription of the scheme, the company said on Sunday.

With this contribution, the promoters' stake in the country's largest telecom operator increased marginally to 71.57 percent from 71.33 percent.

"The Company witnessed participation from both domestic and foreign public shareholders. The issue was oversubscribed approximately 1.08 times and the public participation was approximately 1.2 times,” Vodafone Idea said in a statement.

The promoter/promoter group applied for higher than their aggregate rights entitlement in line with their earlier commitment, however, due to strong demand from public shareholders, the final allotment to the promoter/promoter group was Rs 17,920 crore.
Vodafone Idea Statement 

Also read: Will Rs 25,000-Crore Rights Issue Solve Vodafone Idea’s Problems?

The promoter shareholders -- Vodafone Group and Aditya Birla Group -- had earlier reiterated to the board that they intend to contribute up to Rs 11,000 crore and up to Rs 7,250 crore respectively, amounting to total of Rs 18,250 crore, as part of the rights issue.

"We are progressing well on integration and are well on track to deliver our synergy targets. Our ongoing investments are improving broadband coverage and capacity, enabling us to offer a superior network experience to our customers as well as enhancing our ability to win new broadband customers," said Vodafone Idea Chief Executive Officer Balesh Sharma.

Also read: Vodafone Idea To Seek Shareholders’ Nod For Divesting Fibre Assets

"This funding along with the monetisation of our stake in Indus will allow us to make the required investments in the business to achieve our strategic goals," said Chief Financial Officer Akshaya Moondra.

The rights issue opened on April 10 and closed on April 24.

According to Citi Research, the successful completion of the capital raise is positive for the company as it could strengthen the balance sheet, remove going concern risks, and help enhance network capacity and coverage.

The new shares are expected to be listed on the BSE and NSE on or around May 10, 2019.

Also read: Vodafone Idea Expects Indus Tower Stake Sale In Three-Four Months For Rs 5,500 Crore