Following Vodafone Idea's massive follow-on public offer (FPO), Tuhin Kanta Pandey, secretary of the department of investment and public asset management, informed Fe that the government had no plans to monetarily support its stock in the telecom company.

In order to raise money for capital expenditures (capex), 5G service launch, spectrum reduction, and adjusted gross revenue debt, the telecom company is launching an equity offering worth Rs 18,000 crore on Thursday. The share sale will begin on April 18 (with anchor investors able to purchase on April 16) and end on April 22. To catch up with rivals Bharti Airtel and Reliance Jio, the business needs money.

"A major goal of the revival package for the company is to help prevent a duopoly in the telecom sector, and the government is thrilled that Vodafone will be attracting new investors through their upcoming Rs 18,000 crore FPO," Pandey stated.

According to Pandey, "FPO can guarantee that the business can afford to make the capital expenditures required for the continuous provision of high-quality service to its clients."

At the moment, the public owns 51.09% of Vodafone Idea, including 32.19% controlled by the government through DIPAM, while the promoter group, which includes Kumar Mangalam Birla, owns 48.91% of the company. After the FPO, DIPAM's share will decrease.

The Center agreed in February 2023 to convert the accumulated interest of Rs 16,133 crore on account of deferring AGR and spectrum dues to the Center into equity as part of a package to help Vodafone, which has been struggling financially for a long time.

Since this was a financial rescue plan meant to guarantee that India has three players in the market including BSNL for healthy competition in the benefit of customers, the government had opted not to intervene in the management or the board of the firm.

In accordance with the FPO, the company's shares would be distributed at a price range of Rs 10–11 per share, in contrast to the BSE's closing price of Rs 12.92 on Tuesday. The newly approved preferential issue price of Rs 14.87 to the promoter company is 26% more than the higher end of the pricing band of Rs 11.

This financing would help the business strengthen its position in the domestic telecom industry, where rivals Reliance Jio and Bharti Airtel are well ahead of it. The fundraising follows the Aditya Birla group's Rs 2,075 crore capital injection via a preferential share issuance last weekend.

The founders have been under pressure from the lenders to raise capital through equity before obtaining a further Rs 25,000 crore through debt.

With the funding, it would be able to stop the loss of subscribers caused by its inadequate 4G coverage, which is not accessible throughout India. The money will also be used to pay off government debt associated with spectrum and introduce 5G services.

In addition to preserving fair competition in the market, the business's successful resuscitation will guarantee that, in due time, the government receives its outstanding debt of Rs 2.03 trillion (94% of Vodafone's total debt) from the company in accordance with the revival package.

Every month, Vodafone Idea loses customers, and the company reports quarterly losses of between Rs 6,000 and Rs 8,000 crore.