Vodafone Idea FPO: Indus Towers likely to benefit from telco’s fundraising, network expansion

livemint.com:

Indus Towers, India’s largest mobile tower installation company, is likely to benefit if Vodafone Idea completes its fundraising worth ₹45,000 crore and its network expansion, analysts said. The Follow-on Public Offer (FPO) worth ₹18,000 crore of cash-strapped Vodafone Idea opened for subscription on April 18. The telecom operator is said to use the net proceeds from the new issue to finance the acquisition of equipment for the expansion of its network infrastructure, amounting to ₹12,750 crore.

This includes the establishment of new 4G sites, the augmentation of capacity at both existing and new 4G sites; and the establishment of new 5G sites. Vodafone Idea FPO proceeds will also be used for payment of certain deferred payments for spectrum to the DoT. Vodafone Idea FPO subscription status was 26% on the first day.

Also Read: Vodafone Idea FPO day 2: GMP, subscription status to review. Should you subscribe to this ₹18,000 crore issue? Analysts believe that ₹20,000 crore equity infusion, if successful, would pave the way for debt raising which is estimated to be worth ₹25,000 crore. This would enable Vodafone Idea to step up capex and narrow the gap on coverage and capacity versus peers, IIFL Securities said.

The brokerage firm estimates ₹55,000 crore capex over FY25-27 which should help stem subscriber churn. The successful fundraising of Vodafone Idea will remove the overhang on a key client for Indus Tower. “We estimate Vi to raise its mobile broadband location count from the current ~170,000 to 250,000 over the next two years.