Vodafone Idea can heave a sigh of relief after finally succeeding in raising funds.- The telco has raised ₹4,500 crore from its promoters, and has an option to raise an additional ₹10,000 crore later.
- This comes after the Vodafone Group sold a 7.1% stake in Indus Towers, raising over ₹4,300 crore in the process.
Ahead of the fundraising announcement on March 3, the company’s shares ended the day up by over 6%. This should provide some respite to the company’s investors, who have seen their investment erode by a third since the beginning of 2022.
However, Vodafone Idea’s shares were down by 3.6% as of 9:40 a.m., today, March 4, as the Russia-Ukraine conflict continues to worsen.
The company’s board has room to raise an additional ₹10,000 crore via equity and debt instruments, including depository receipts and foreign currency convertible bonds.
This comes after the Vodafone Group $4 a total of 7.1% stake in tower company Indus Towers – it raised ₹1,442 crore via a 2.4% stake sale via a block deal, and another ₹2,900 crore by selling the balance 4.7% stake to Bharti Airtel, a rival of Vodafone Idea.
Out of the ₹4,500 crore, 75% of the funds will come in from the Vodafone Group, with the Aditya Birla Group contributing the remaining 25%.
$IDEA.NSEFundamental Development :Rs 14,500 cr fund-raising planIt will raise Rs 4500 crore via a preferential share issue at Rs 13.30 a share which is quite above current market priceTechnicals :Stock is at demand zone as well as at support level of 200 Days SMAWe can expect bounce back from this level10.35 Seems like good accumulation zoneBullish trend will start above 11.45 closing
— (@CuriousCommunity) $4]]>The fundraise should help Vodafone Idea work towards its plans to raise capital expenditure to the tune of $2 billion (approx. ₹15,000 crore).
This will primarily be aimed at boosting the telco’s network capacities, improving the technology backend and participating in the upcoming 5G spectrum auction, expected to happen sometime in the first quarter of 2022.
The long-awaited fundraise comes soon after the ailing telecom operator opted for the Indian government’s adjusted gross revenue (AGR) dues moratorium, allowing it to obtain a much-needed cash flow relief.
According to the AGR and spectrum dues case in the Supreme Court, the total demand stood at ₹58,254 crore of which Vodafone Idea has already repaid ₹7,854 crore. Its current outstanding is ₹50,339 crore.
More recently, $4 to the Department of Telecommunications (DoT) to release its bank guarantees worth ₹15,000 crore, and also freeze the calculation of interest on its AGR dues on the date of its application for moratorium.
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