Vodafone Idea historic mega rights issue opens on 10th April 2019

Published on Friday, April 5, 2019 by Dilip Davda

Vodafone Idea Ltd. (VIL) - (erstwhile known as Idea Cellular Ltd.) the new entity emerged post merger of Vodafone and Idea cellular companies is coming out with a maiden mega rights issue to mobilize Rs 24999.80 cr. The company is offering 19999830911 equity shares of Rs 10 each at a premium of Rs 2.50 per share (i.e. at Rs 12.50 per share fixed price). Issue opens for subscription on 10th April 2019 and will close on 24th April 2019.

The details of VIL's Equity Share capital, net worth, total revenue, profit after tax, earnings per Equity Share (basic and diluted), the net asset value per Equity Share and total borrowings as at and for the nine month periods ended December 31, 2017 and December 31, 2018 and as at and for the Financial Years ended March 31, 2016, March 31, 2017 and March 31, 2018 derived from the Restated Consolidated Financial Information is as follows:

VIL is offering 87 rights shares for every 38 equity shares held by existing investors as on 2nd April 2019 (Record date). Post allotment shares will be listed on BSE and NSE. The original shareholders may opt for additional shares provided they are applying for full entitlements. Rights letter of offer gets traded in market under renunciation and renouncee cannot apply for additional shares.

The issue is jointly lead managed by Kotak Mahindra Capital Co. Ltd., DSP Merrill Lynch Ltd., Morgan Stanley India Co. Pvt. Ltd., HDFC Bank Ltd. and SBI Capital Markets Ltd. Bigshare Services Pvt. Ltd. is the registrar to the issue.

Post issue VIL's current paid up equity capital of Rs 8735.40 cr. will stand enhanced to Rs 28735.40 cr. and its other equity will stand enhanced from Rs 55800 cr. to Rs 60800 cr. Thus even after issue, its NAV will be around Rs 21 against offer price of Rs 12.50 per share. Post issue VIL's current debt equity ratio of 1.78 will come down to around 1.

VIL currently has 1.4 million retail touch points, 387 million subscriber, 11100 branded stores, 32% revenue market share and 38% customer market share with two complementary brands 'Vodafone' and 'Idea', VIL is poised for a healthy competition. IT enjoys larges spectrum portfolio and is one of the three main players that include Jio and Bharti. Post merger VIL is poised for better synergy to expand its operations rapidly. According to VIL, Indian market is a large under-penetrated growth story.