Vodafone Idea Limited (VIL) today announced the approval of a preferential allotment of approximately 166 crore equity shares at Rs 14.80 per share to two of its key vendors, Nokia Solutions and Networks India Private Limited (Nokia) and Ericsson India Private Limited (Ericsson), raising a total of Rs 2,458 crore.
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Preferential Allotment Details
This issue price is about 35 percent higher than the follow-on public offer (FPO) price and includes a six-month lock-in period. Nokia and Ericsson will invest Rs 1,520 crore and Rs 938 crore, respectively, pending shareholder approval at the Extraordinary General Meeting (EGM) on July 10, 2024, VIL said in a statement on Thursday.
"Nokia and Ericsson both have a long-term partnership with VIL as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their outstanding dues. It further bolsters VIL’s capex rollout for building a top-quality 4G and 5G network to contribute towards India’s digital transformation," Vodafone Idea said.
Shareholding Structure Post-Allotment
Post-allotment, Nokia and Ericsson will hold 1.5 percent and 0.9 percent of VIL's shares, respectively, while promoter shareholding (ABG and Vodafone) will be at 37.3 percent, the Government of India at 23.2 percent, and public shareholding at 37.1 percent.
Vodafone Idea said it has now raised about Rs 24,000 crore in equity, including recent conversions and issuances. Additionally, the company is in active discussions with its lenders to raise debt funding to the tune of Rs 25,000 crore.
Akshaya Moondra, CEO of Vodafone Idea Limited, said, "VIL is all set to participate in the industry growth with the right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities. As VIL embarks on its growth journey, support from key stakeholders is critical, and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the Company, setting the stage for the next phase of our growth."
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Network Expansion and Subscriber Base
This combined fundraise will enable VIL to expand 4G coverage and launch 5G services. The company said that, as of March 31, 2024, it has a subscriber base of 212.6 million and a 4G population coverage of over 1 billion Indians.
