Vodafone Idea said it has priced its rights issue at Rs 12.50 per share.
The offer price of Rs 12.50 per share represents a discount of 31% over the post-issue, weighted average price of Rs 18.09 per share, assuming that the company manages to sell all the shares it wants to under the rights issue.
The company said investors will get the right to buy 2.29 shares for each share of Vodafone Idea that they currently hold.
In other words, for every 38 shares held by them, they can buy 87 under the right issue.
The company has already said that if any investor fails to exercise his right to purchase extra shares under the issue, then the promoters have the right to buy those shares as well.
This is likely to push the promoters’ shareholding above the 75% threshold. Under SEBI norms, listed companies should have at least 25% of their shares held by the public.
However, according to sources, the SEBI has allowed the company to go ahead with the rights issue and then bring down promoter shareholding below the 75% mark over the next 12 months.
The company has previously said that it intends to raise Rs 25,000 cr via the rights issue to find money for expanding its data network in India.
The company has lost millions of investors in recent months as its two rivals, Bharti Airtel and Reliance Jio, have come up with aggressive data tariffs.
Moreover, the company’s network is not comparable to those of its rivals at present due to its fragmented nature. However, Vodafone Idea has announced that it plans to rearrange and consolidate its spectrum and towers over the next one year to more than double its data carrying capacity.
The company also recently unveiled India’s cheapest data pack, dislodging Reliance Jio from its position as the provider of the most competitive 4G data pack in India.