Vodafone Idea plans Rs 25000-cr stock sale at sharp discount; shares tumble

Vodafone Idea Ltd, India’s largest telecommunications company by subscribers, on Wednesday approved Rs 25,000 crore ($3.63 billion) rights issue at a sharp discount, sending its shares tumbling.

The deal is the second major fundraising by an Indian telco this year after Bharti Airtel Ltd announced a similar plan to reduce debt and fund operations in a market blighted by steep price competition.

Shareholders will be able to buy 87 shares for every 38 shares held for an issue price of Rs 12.50 apiece, the firm said in a statement. That will be around 60 percent discount to the current share prices.

Indian telcos are trying to cut debt and shore up balance sheets at a time when the industry grapples with a prolonged price war triggered by the 2016 entry of Reliance Jio Infocomm Ltd, owned by Asia’s richest person, Mukesh Ambani.