Vodafone Idea (Vi), the third-largest telecom operator in the country, has raised around Rs 5,400 crore from anchor investors. The telco is raising a total of Rs 45,000 crore through a mix of equity and debt. This Rs 5,400 crore came from anchor investors, by allocating 4,90,90,90,908 equity shares at Rs 11 each. Vi plans to raise Rs 18,000 crore through FPO (Follow-on Public Offer). It will open on April 18 and close on April 22.
The telco also raised Rs 2,075 crore from an Aditya Birla Group entity called Oriana Investments Pte Limited. It definitely instilled confidence in the minds of the investors and fund houses. With fundraising, Vodafone Idea will get an opportunity to compete with Reliance Jio and Bharti Airtel on equal grounds.
Read More - Vodafone Idea FPO to Raise Rs 18000 Crore will Open on April 18, 2024
Currently, Vi is losing subscribers at an alarming pace. This is because of inferior networks. The cash-strapped telco wants to raise funds to invest in networks and possibly roll out 5G in the future. The lack of 5G is also pushing customers towards Jio and Airtel, both of which are offering customers unlimited 5G data.
The active subscriber base of Vi is under 200 million now and it is falling further. The overall subscriber base is under 220 million. At the same time, Jio has more than 460 million users while Airtel has more than 380 million.
Read More - Vi Lost a Million Wireless Users in Feb 2024: TRAI Data
A tariff hike in the near future will keep investors interested in the growing capacity of Vi. With fresh funds, Vi can possibly invest more in networks and capture some of the lost market share from its competitors. Mobile tariff hikes in India are expected after the competition of general elections. The telecom operators are likely to increase the tariffs by up to 20% which will help with boosting their average revenue per user (ARPU), something Vi needs desperately.
