Ailing telco, Vodafone Idea or Vi is going through turbulent times. The telco is losing customers left and right to Jio and Airtel. Under a very heavy debt, Vi is now looking to raise Rs 18000 crores as a follow on offer.
The company intends to use the competition to strengthen its 4G capabilities and possibly roll out 5G services in some major cities.
Today the board of directors of Vi have fixed the price range of the follow on offer. The price range fixed is Rs 10-11. But, even at the upper band of the price range, the price is at a huge 26% discount to its present market price.
Reeling under the pressure of huge debt, losing customers every quarter, a below average ARPU of Rs 147 as compared to its peers have all added pressure on the telco.
If this fundraise successfully goes through, it would be the first major follow on offer after what Yes Bank pulled off a couple of years ago.
Though the government has taken a stake in Vi, promoters Aditya Birla group is committing only Rs 2075 crores to the telco. The huge debt still remains the major overhang on the stock price.
Retail investors are now expecting a white knight to clear the dues, and infuse some much needed capital.
