Vodafone Idea board approves raising ₹1,980 crore via share sale
What's the story
Vodafone Idea's plans to raise up to ₹1,980 crore via a preferential share sale have been approved by the board.
The shares will be sold to entities within its UK parent company Vodafone Group Plc.
The decision, which was announced today, involves the sale of 175 crore shares at ₹11.28 per equity share.
The telecom firm's board approved a preferential issue of ₹1,280 crore to Omega Telecom and ₹700 crore to Usha Martin Telematics, both part of the Vodafone Group.
Stake expansion
Omega Telecom, Usha Martin Telematics to increase stakes
The preferential share sale will be advantageous for Omega Telecom Holdings and Usha Martin Telematics.
After this deal, Omega Telecom Holdings's stake in Vi will increase from 0.4% to 1.98%. Meanwhile, Usha Martin Telematics's stake will go up from 0.13% to 1%.
This comes after Vi announced a board meeting last week to discuss raising up to ₹2,000 crore through equity shares or convertible securities sale on a preferential basis.
Divestment strategy
Vodafone Group Plc's divestment plan
The fundraising announcement comes on the heels of Vodafone Group Plc's decision to sell its entire 3% stake in Indus Towers Ltd through open market transactions.
India's largest mobile tower installation company, Indus Towers became a subsidiary of Bharti Airtel in August after a share buyback.
As of September, Bharti Airtel held a 50% equity stake in the company.
Financial outlook
Financial status and future plans
Vodafone's adjusted gross revenue (AGR) dues amount to ₹70,300 crore, while its cash balance is ₹13,620 crore.
On the day of Vi's Q2 results announcement, the company's CEO Akshaya Moondra said they are in talks with lenders for debt funding toward network expansion.
The planned capex for the same is estimated to be between ₹50,000 crore and ₹55,000 crore over the next three years.