Debt-ridden telecom operator Vodafone Idea' ₹18,000-crore follow-on public offer (FPO) was fully subscribed on the final day of the bidding process with an overall subscription of 5.04 times so far.
₹5,720 crore out of the total fund raise will be used in the 5G rollout.
"But we do not need to buy much of new spectrum," Moondra added.Vodafone Idea has been consistently losing subscribers.
According to the TRAI data, the company had lost 15.2 lakh subscribers in the month of January.
The management had earlier mentioned that Vodafone Idea currently has 215 million subscribers.Moondra said that the reason the company disproportionately lost subscribers is due to the lack of 4G coverage.
Debt-ridden telecom operator Vodafone Idea' ₹18,000-crore follow-on public offer (FPO) was fully subscribed on the final day of the bidding process with an overall subscription of 5.04 times so far. The FPO, the largest ever, will close on April 22.The issue received bids for 6,349 crore shares against the total offer size of 1,260 crore shares on the last day, according to information on the NSE.The quota reserved for qualified institutional bidders (QIBs) was booked 13.89 times while those of non-institutional investors got 3.40 times subscription. The retail investors portion was booked 0.68 times.The grey market premium (GMP) of Vi has been around ₹0.50-1.50 per share.The company is offering its shares in the range of ₹10-11 per equity share, lower than ₹12.22 market price of the share on the NSE today.Ahead of the FPO opening, VIL mopped up ₹5,400 crore from nearly 60 anchor investors, making it the third-largest anchor book after One 97 Communications and Life Insurance Corporation."Potentially, the government could own an a 80%+ stake in Vi on a fully diluted basis in the worst case, which would limit any meaningful upside for Vi’s minority investors," said domestic brokerage Kotak Institutional Equities in a note.However, the issue should help bridge the network coverage gap and improve competitiveness versus peers.With so much uncertainty, making money on the stock will require impeccable timing, which may not be easy for retail investors. Mehta Equities analyst Prashanth Tapse recommends investors to not take part in the FPO, citing continuous loss of money and subscribers.The capital raised would give the ailing telecom operator the firepower to improve its positioning in the Indian telecom market, where it currently trails larger rivals including Reliance Jio and Bharti Airtel, by a wide margin.The funds will also help Vodafone Idea shore up finances for the much-delayed 5G rollout and strengthening 4G services, and payment of vendor dues.Vi intends to allocate more than two-thirds or 70% of the total funds raised towards capital expenditure to bolster its network infrastructure and expand its market presence.In an exclusive interaction with CNBC-TV18, Vodafone Idea's CEO Akshaya Moondra said that the amount will be split between the company's 5G rollout and 4G expansion. ₹5,720 crore out of the total fund raise will be used in the 5G rollout. He further added that the total money raised will be enough to fund capex plans for the next three years.The 4G investment of ₹7,000 crore will be "roughly equally split between 4G coverage expansion and 4G capacity growth." The capex for spectrum is about ₹2,000 crore. "But we do not need to buy much of new spectrum," Moondra added.Vodafone Idea has been consistently losing subscribers. According to the TRAI data, the company had lost 15.2 lakh subscribers in the month of January. The management had earlier mentioned that Vodafone Idea currently has 215 million subscribers.Moondra said that the reason the company disproportionately lost subscribers is due to the lack of 4G coverage. However, he expressed confidence in arresting the loss of subscribers and participate in the growth of the industry. He also expects the 4G coverage expansion to happen at a rapid pace.Besides the equity funding, the company is also in talks to raise another ₹25,000 crore through banks. The company had highlighted that it is in talks with lenders for the same and Moondra expects the bank funding to close "as quickly as possible."
