Voda Idea Seeks ₹20,000 Crore Funding Boost

28 Feb 2024 , 01:04 AM

For its ₹20,000-Crore equity fundraise, Vodafone Idea is probably going to combine a follow-on public offer (FPO) with preferential allotment to promoter, according to a report by CNBC-TV18 on February 28 that cited sources.

According to the channel, the promoter company of the Aditya Birla Group may provide funding through the preferential allotment of shares.

The telco’s shares were trading at ₹13.7 on the BSE on Wednesday, down 13.56% from its opening price.

Vodafone Idea announced on Tuesday that its board has approved raising up to ₹20,000 Crore in equity from promoters and other investors by June. The company wants to bolster 4G services and raise funds for the much-delayed rollout of 5G.

The government owns little more than 33% of the debt-ridden company, which intends to raise ₹45,000 Crore through a combination of debt and stock in an attempt to replicate the services provided by competitors Jio and Bharti Airtel.

Vodafone Idea announced on Tuesday that its board has approved raising up to ₹20,000 Crore through a combination of equity and/or equity-linked instruments. However, the company did not disclose the identities of any new investors.

Furthermore, it was unclear how much money the promoters would actually contribute to the business.

The management has been given permission by the VIL board to select bankers and lawyers to carry out the fundraising.

On April 2, 2024, VIL will convene a shareholder meeting. Should the meeting be approved, the company anticipates completing the equity fund raise in the upcoming quarter.

As previously promised, the promoters would take part in the planned stock raise as well, the business stated.

Aditya Birla Group Chairman and billionaire entrepreneur Kumar Mangalam Birla reaffirmed the group’s unwavering support to the financially stressed telco last week and said that attempts are underway to bring in outside investors.

For the last few quarters, VIL has been having trouble raising money, and this has been affecting its capacity to invest, grow, and even pay its vendors. The company’s problems have been made worse by ongoing subscriber losses.

Following its permission for VIL to convert debt of approximately ₹16,000 Crore into equity, the government currently holds the largest stake in the company.

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