Voda Idea seeks funding options, board meets Feb 27

23 Feb 2024 , 11:38 AM

In an exchange statement, Vodafone Idea, a telecom business owned by the Aditya Birla Group, stated that it will discuss fundraising during a board meeting on February 27.

‘Consider and evaluate any and all proposals for raising of funds in one or more tranches by way of a rights issue, further public offer, private placement including preferential allotment, qualified institutions placement, or through any other permissible mode and/or combination thereof as may be considered appropriate,’ the company stated. This includes proposals for issuing equity shares or securities convertible into equity shares, warrants, convertible debentures, warrants, and/or non-convertible debentures including non-convertible debentures along with warrants, which may or may not be listed.

After Aditya Birla Group Chairman Kumar Mangalam Birla stated on Thursday that the group was dedicated to the cash-strapped Vodafone Idea and was looking to entice external investors, shares of Vodafone Idea finished 6% higher on November 22.

The company’s net loss for Q3FY24 was ₹6,985.9 Crore, which is a 12.56% decrease from ₹7,990 Crore in the same time last year. Over the same period, revenue increased by 0.49% to ₹10,673.1 Crore from ₹10,621 Crore in the third quarter of the previous fiscal year. The company’s EBITDA, or profits before interest, taxes, depreciation, and amortization, increased by 140 basis points to 40.8% during the quarter from 39.4% during the prior fiscal year.

Based on Nuvama’s Q3FY24 earnings, analysts have issued a decrease call on the shares. The report states that Nuvama continues to monitor the capital-raise and ARPU trajectory, and it further states that VI must make sure it does not lag behind its competitors in the deployment of 5G.

In FY2025, Vodafone Idea would have to repay ₹54 billion in debt. Fundraising is still, without a doubt, the company’s most important need given its heavy debt load and payback commitments, the study stated.