In order to raise capital, Vodafone Idea, a merged telecom company, has priced its rights issue INR 12.50 per share, which is drastic slash from the current market price. Through the current pricing, the company anticipates garnering capital up to INR 25,000 crore, as reported by the Indian daily news.
Vodafone Idea seeks the capital for expanding its 4G coverage in India. The telecoms rights issue will begin on April 10 and will end on April 24.
The rights entitlement ratio is at 87 equity shares for every 38 held by eligible shareholders of the company on the record date of April 2, the company said in a statement, as reported by the Indian daily news.
In the rights issue, the promoters, primarily Aditya Birla Group and Vodafone, will endow money up to INR 7,250 crore and INR 11,000 crore respectively.
Certain promoter shareholders have also indicated that in case the rights issue is under-subscribed, they reserve the right to subscribe to part or the whole of the unsubscribed portion, subject to applicable laws, said in the statement, as reported by the Indian daily news.
As per ICICI Securities estimation, the shares of Aditya Birla Group in Voda Idea will soar by 1.71 per cent, reaching to 28.26 per cent whereas the shares acquired by Vodafone Group will plunge down by 0.54 per cent, following the two aforementioned telecoms subscribe to their shares. However, the combined stake of two telecoms will increment by 1.17 per cent, from 71.33 per cent to 72.5 per cent.