Vodafone Idea 2.0 begins with ₹18,000 crore FPO: Kumar Mangalam Birla

On the back of the ₹18,000 crore fundraise through a follow on offer, Vodafone Idea will stage a smart turnaround, according to Kumar Mangalam Birla, Chairman, Aditya Birla Group. 

Speaking at the FPO listing ceremony, Birla said, “This moment in some ways, marks the beginning of Vodafone Idea 2.0. I believe that a revitalized Vodafone Idea is important for India.”

• Also read: Vodafone Idea FPO: Applaud the Endeavour, Skip the Ride

The FPO opened at a 7.2 per cent premium at ₹11.80 on Thursday morning. Vodafone Idea will spend ₹12,750 crore of the net issue proceeds for the expansion of the network infrastructure by setting up new 4G and 5G sites and expanding the capacity of existing 4G sites.

“The successful conclusion of India’s largest FPO of ₹18,000 crores marks one such turning point for the telecom industry. The fact that so many marquee investors participated in this equity issuance is a testament to the government’s vision of a digital India. The emphatic oversubscription of the FPO – with the overall book being subscribed 7 times and the institutional book being subscribed 19 times — demonstrates the tremendous potential of the India digital story and Vodafone Idea’s role in it,” Birla said. 

He reinforced the promoters commitment to sustain Vodafone Idea’s operations. “Along with our partner, Vodafone Group, we have cumulatively invested around ₹170,000 crore in the Indian telecom industry,” he said.

Prior to this FPO, over 75 per cent of the ₹30,000 crore raised by the company in the last five years came from the two promoter groups, Birla stated.

 The latest fund raise has also seen an investment of over ₹2,000 crore from the Aditya Birla Group. 

• Also read: Vodafone Idea: Will not flounder, but will it flourish?

“The proceeds from this fund raise are earmarked for a significant capital expenditure cycle. This growth capex will pave the way for a network and technological upgrade across key markets. And this in turn will enhance operational efficiencies and lead to better performance. The cycle of investment will trigger the cycle of growth,” Birla said. 

 “Today, as we stand on the cusp of a digital revolution, a rejuvenated Vi together with other telecom players, will meaningfully contribute to the exciting and sustainable growth journey ahead,” he concluded.