Mumbai: GQG Partners, an investment firm, and State Bank of India Mutual Fund are contemplating a combined investment of around $800 million in the $2.16 billion share offering of telecom company Vodafone Idea, media reported.
Headquartered in the US, the company intends to invest nearly $500 million, while SBI Mutual Fund is exploring an investment ranging from $200 million to $300 million in the follow-on public offering, according to a Reuters report.
In 2018, Vodafone Idea was created through the merger of Vodafone Groups Indian operations with Idea Cellular, a local company, in a deal valued at $23 billion.
This merger burdened the company with huge debt.
With Vodafone holding a stake of over 25%, Vodafone Idea is Indias third-largest telecom operator, trailing behind Reliance Jio and Bharti Airtel, both of which have eroded its market share over the past few years.
The Indian government holds a majority stake of over 30%, having converted outstanding government dues into equity in 2022.
Vodafone Idea announced earlier on Friday that the sale of new shares will take place from April 18 to April 22.
GQG and SBI Mutual Fund are contemplating investments within the institutional quota of what is poised to become Indias largest secondary offering.
A final decision regarding their investments has yet to be made.
The share sale is being managed by investment banks Jefferies, Axis Capital, and SBI Capital Markets.
Vodafone Idea intends to utilize the proceeds to enhance its 4G network, establish 5G infrastructure, and settle tax and dues obligations, as outlined in its regulatory filing this week.
Indian origin Rajiv Jain who leads GQG has recently exhibited interest in supporting struggling companies with declining stock values and capitalizing on them.
Last year, he committed substantial funds to the Indian conglomerate Adani Group after its shares plummeted by half following a short-seller attack.
Adani Groups stock prices have skyrocketed, more than doubling since then.
GQG oversees a portfolio of over $100 billion worldwide, with $20 billion allocated to India, primarily in recent years.
Rajiv Jain has expressed optimism about the countrys economic future in various interviews.
In February, Vodafone Ideas board green-lighted a $5.4 billion fundraising initiative through a combination of equity and debt.
This move aims to back the companys expansion plans and ease the burden of cash-strapped Vodafone Idea.
Competitors Bharti Airtel and Reliance Jio have already rolled out 5G services across most regions of India.
