VI gets approval to raise ₹2,075cr from Aditya Birla Group
Vodafone Idea has announced its plans to secure a substantial investment of ₹2,075 crore from its promoter, the Aditya Birla Group. The telecom firm's board approved the issuance of up to 1.39 crore equity shares. These shares will be issued to Oriana Investments Pte. Ltd., an entity of the Aditya Birla Group, at a price of ₹14.87 each, inclusive of a premium of ₹4.87 per share.
Share capital increase and pending shareholder approval
In addition to the investment, Vodafone Idea's board has permitted an increase in VI's authorized share capital from ₹75,000 crore to ₹1 lakh crore. The revised share capital will consist of ₹95,000 crore of equity share capital and ₹5,000 crore of preference share capital. This preferential issue and the proposed increase in authorized share capital, are subject to shareholder approval at a general meeting scheduled for May 8.
Fundraising strategy and future plans
The cash infusion from the Aditya Birla Group forms part of Vodafone Idea's larger fundraising strategy, which aims to raise a total of ₹45,000 crore through a combination of equity and debt. The company plans to raise ₹20,000 crore through equity by the end of June. This will be supplemented with approximately ₹25,000 crore from lenders. The funds raised will be used for vendor repayment, enhancing its 4G network, and financing launch of competitive 5G services against Jio and Airtel.
Vodafone Idea's current financial status
Vodafone Idea's total gross debt currently stands at over ₹2.15 trillion, with more than 90% owed to the Centre as spectrum dues. The company's bank debt is less than ₹4,500 crore. VI's net loss narrowed to ₹6,986 crore in the October-December quarter, representing a decrease from the previous quarter's loss of ₹8,738 crore. Revenue from operations saw a marginal year-on-year increase of 0.5%, attributed to an improved subscriber mix and a rise in entry-level tariffs.
