Vodafone Idea Ltd., the telecom service provider, announced on Monday, December 9, that it will be issuing equity shares worth ₹1,980 crore to two promoter group entities.
The shares will be issued at a price of ₹11.25 per share, which is a premium of 39% to Monday’s closing price and modestly higher than the FPO price of ₹11 per share.
Vodafone Idea in an exchange filing last week had said that its board will meet on December 9 to consider the issue of equity shares or convertible securities to the tune of ₹2,000 crore.
Out of this, it will be issuing shares worth ₹1,280 crore to Omega Telecom Holdings Pvt. Ltd. and the remaining shares worth up to ₹700 crore to Usha Martin Telematics Ltd.
Both of these companies are Vodafone Group entities and classified as promoters of Vodafone Idea Ltd.
Just last week, the Vodafone Group sold its remaining 3% stake in Indus Towers via block deals for ₹2,802 crore. Part of those proceeds will be used to repay its own existing debt to lenders.
The remaining part of the proceeds are likely to be infused into Vodafone Idea through this issue of shares or securities, who will then use that to clear the outstanding dues owed to Indus Towers.
As per brokerage reports, Vodafone Idea’s current outstanding to Indus Towers stands at ₹3,500 crore.
Earlier this year, Vodafone Idea had raised over ₹18,000 crore through India’s largest Follow-on Public Offer (FPO) on record. The stock also went on to make a high of ₹19 this year, but has since corrected nearly 60% from those levels.
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