Vodafone Idea expects Rs 25k cr rights issues to be fully subscribed

Vodafone Idea on Tuesday said that it expects the Rs 25,000 crore rights issue, which closes on Wednesday, to be fully subscribed. "Our interactions with the investors suggest that there is a strong demand for the rights issue. Axiata`s renunciation has been taken up fully with strong demand. Hence, we have good reason to believe that the issue will be fully subscribed," Akshaya Moondra, Chief Financial Officer (CFO), Vodafone Idea, told IANS.

The Vodafone Idea rights issue entitlement worth about Rs 2,000 crore renounced by the Malaysia-based Axiata Group was fully subscribed by both new and existing investors. Axiata held 71.2 crore shares, and in the ongoing rights issue it was entitled to subscribe 163 crore shares worth about Rs 2,000 crore.

The Malaysian firm held 8.1 per cent stake in Vodafone Idea before the Rs 25,000 crore rights issue started on April 10. The stake has come down to 2 per cent post renunciation. The company issued up to 20 billion fully paid-up equity shares of Rs 10 face value at a price of Rs 12.50 per share for the rights issue.

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Both the promoter groups (Vodafone and Aditya Birla) have confirmed their participation of up to Rs 11,000 crore and Rs 7,250 crore, respectively, in the rights issue.  In case the rights issue is under-subscribed, the promoters reserve the right to subscribe part or the whole amount of the unsubscribed portion, the company had said.

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The Vodafone Idea rights issue is one of the largest in recent times by any company. The issue is keenly watched by the industry as the telecom sector is in the grip of low profitability and losses with promoters` contributions to the telecom companies being seen as a major source of funding for survival.