Voda Idea to make ‘smart turnaround’, FPO a new beginning: K M Birla

Vodafone Idea will make a “smart turnaround” after raising Rs 18,000 crore through a follow-on public offer (FPO) at a time when India “deserves” three private telecom companies, said Kumar Mangalam Birla, chairman of Aditya Birla Group, in Mumbai on Thursday.

Vodafone Idea’s new shares were listed on the stock exchanges and were trading marginally down at Rs 13.09 a share.

“Aditya Birla Group has remained committed to this sector for over two and a half decades now. Along with our partner, Vodafone Group, we have cumulatively invested around Rs 170,000 crore in the Indian telecom industry. Before this follow-on public offer, in the last five years, out of Rs 30,000 crore raised by the company, more than 75 per cent has come from the two promoter groups. The latest fundraise has also seen an investment of over Rs 2,000 crore from the Aditya Birla Group. This continued commitment stems from our belief in the promise of India’s digital story,” said Birla at the FPO ceremony.

“The proceeds from this fundraiser are earmarked for a significant capital expenditure cycle. This growth capital expenditure will pave the way for a network and technological upgrade across key markets. And this, in turn, will enhance operational efficiencies and lead to better performance. The cycle of investment will trigger the cycle of growth. On the back of this fundraiser and continued support from banks, Vodafone Idea will stage a smart turnaround,” Birla said.
Following the FPO, the Indian government’s stake was diluted to 24 per cent, while Vodafone PLC’s stake was 23 per cent. The Aditya Birla group will hold an 18 per cent stake post-dilution.

Birla said the successful conclusion of India’s largest FPO, of Rs 18,000 crore, marks a turning point for the telecom industry. “The fact that so many marquee investors participated in this equity issuance is a testament to the government’s vision of a digital India. The emphatic oversubscription of the follow-on public offer – with the overall book being subscribed seven times and the institutional book being subscribed nineteen times – demonstrates the tremendous potential of India’s digital story and Vodafone Idea’s role in it. The robust engagement from both foreign and domestic investors is heartening. Notably, the full subscription of the retail portion is truly commendable, given the sheer scale of the offer,” Birla said.

Vodafone Idea’s journey to this point has been significantly shaped by the government’s path-breaking reform package, which was nothing short of transformational for the entire sector, Birla said. “The policy environment today encourages investment, innovation, and competition. India’s digital economy is booming, and robust telecom networks are crucial to support this growth. A nation of 1.4 billion people deserves three private telecom players,” Birla concluded.