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Vodafone Idea Rs 25,000 cr rights issue oversubscribed
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SME Times News Bureau | 25 Apr, 2019
India's largest telecom service company Vodafone Idea's Rs 25,000 crore
rights issue has been oversubscribed and managed to garner Rs 26,500
crore, as per preliminary reports.
Banking sources said the
issue, which closed on Wednesday, was oversubscribed owing to the huge
demand from retail and institutional subscriptions.
In a
regulatory filing, the telco said: "On the basis of preliminary
informations, total applications from ASBA and Non-ASBA have exceeded
the total issue amount of Rs 25,000 crore."
"The data pertaining
to the applications is preliminary and is subject to verification and
clearing of cheques, as applicable and finalisation of the basis of
allotment."
Vodafone Idea's clarification came after data on the
stock exchanges at issue close showed that it had received cumulative
bids on the BSE and NSE for 16,01,67,80,185 shares against
19,999,830,911 shares on offer.
ASBA provides an alternative
mode of payment in issues whereby the application money remains in the
investor's account till finalisation of the basis of allotment.
Sources
said the rights issue has seen more demand than the shares that have
been offered. The retail portion too has been fully subscribed.
Malaysia's
Axiata Group Berhad has already decided not to participate in the
rights issue, renouncing its shares entitlement in favour of investors
through transactions which were picked up by SBI MF and Franklin
Templeton among others.
The rights issue was priced at Rs 12.50
per share, a discount of 27 per cent to Vodafone Idea's closing share
price of Rs 17.20 on Wednesday.
The promoters of the company had
committed to subscribe to the unsubscribed portion, if any. The company
had got special permission from market regulator Sebi to increase its
holding beyond 75 per cent - the ceiling set for promoter holding in
listed companies - in case the issue was under-susbcribed.
However,
high demand from non-promoter shareholders means the promoter will not
have to exercise this option. Currently, the promoter holding in
Vodafone Idea is 71.33 per cent.
The telco will use the funds to repay debt and ease financial pressure to take on rivals Reliance Jio and Bharti Airtel.
Vodafone
Idea, whose losses widened to over Rs 5,000 crore during the
October-December quarter with debt of Rs 114,760 crore at the end of
December, plans to use most of the funds - nearly Rs 19,000 crore - to
repay debt, including spectrum dues.
The Vodafone Idea stock
closed lower on Thursday at Rs 16.90 a share, down 0.30 points, or by
1.74 per cent, on its previous close on the BSE.
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