Vodafone Idea is in talks with lenders for loans totalling Rs 15,000 crore ($1.8 billion) in the next two years, Bloomberg reported on May 2 citing sources.
Business Today could not confirm the development on its own.
This would be the first move in a plan to raise Rs 25,000 crore overall in debt as the billionaire Kumar Mangalam Birla-led wireless carrier seeks to turn around its unprofitable operations. The proceeds are expected to repay operational creditors, roll out a 5G network and bid for additional spectrum.
Fresh from the success of a $2.2-billion share sale last month, the joint venture between Vodafone Group Plc and Birla’s conglomerate has reached out to government-owned banks such as State Bank of India, Bank of Baroda and Punjab National Bank, as well as some private-sector lenders, Bloomberg reported quoting sources.
SBI may take the lead of a consortium with state-owned and private bankers, and the funds would be disbursed in tranches, the report said, adding that discussions are continuing and details of the fundraising, including size, could still change.
Vodafone Idea’s Rs 18,000-crore follow-on public offer (FPO), India’s biggest, closed successfully after being subscribed 7 times with strong demand from global institutional investors.
Vodafone Idea had priced the issue at Rs 10-11 a share, a 26 percent discount to the Rs 14.87 a share that was set for the preferential issue to one of the promoters.
The FPO had the highest subscription of 19.31 times from Qualified Institutional Buyers and 4.54 times from non-institutional investors. The retail portion was also fully subscribed. It had also raised Rs 5,400 crore via anchor investors.
Brokerage Nuvama in its latest note expects Vodafone Idea to be included in the MSCI Global Standard index in the August review. Vodafone Idea shares may attract $213 million in inflows, it added.
India’s weight in the MSCI Emerging Market Index stands at 18 percent, a significant leap from just 8 percent in early 2020. By the second half of 2024, Nuvama anticipates crossing the 20 percent threshold in the EM Index.
