Vodafone Idea board to consider fund raising on April 6 via preferential issue

4 Apr 2024 , 12:38 PM

Vodafone Idea announced on April 3 that it may consider raising capital through a preferred issue at its board meeting on April 6.

According to a regulatory document filed by the company, a meeting of the Board of Directors of the Company is scheduled to be held on Saturday, 6th April 2024, inter-alia, to consider proposal for issuance of Equity Shares and / or Convertible Securities on a preferential basis.

The news comes hours after the telecom business said earlier today that shareholders had authorized a ₹20,000 Crore cash increase, which may possibly open up income prospects for global telecom gear manufacturers such as Nokia and Ericsson.

The money will help the telecom giant extend its 4G network and launch 5G services. Analysts believe that these improvements will help the corporation reclaim some of its competitive advantage by providing a better customer experience.

On March 1, it was reported that Vodafone Idea was in negotiations with investment banks about creating an effective fund-raising structure that would optimise different channels such as a rights issue, preferential allotment, or a follow-on public offering. Without enough finance, the telecom company risks losing customers, which explains the heavy market focus on development as it seeks to increase average revenue per user (ARPU).

Vodafone Idea is trying to raise roughly ₹15,000-20,000 Crore through a Follow On offer, which the board approved in February, as it seeks to infuse funds to fund the much-delayed 5G rollout and boost its 4G services.

At around 12.16 PM, Vodafone Idea was trading 3.32% lower at ₹13.10, against the previous close of ₹13.55 on NSE. The counter touched an intraday high and low of ₹14.10 and ₹13.10, respectively.

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