NEW DELHI: Cash-strapped telecom operator Vodafone Idea (VIL) is making another effort to raise funds. VIL is now planning to raise up to Rs 500 crore from one of its promoters. It informed the exchanges late on Sunday night that its board is going to meet on June 22, 2022, to consider a proposal for raising up funds from its UK-based promoter Vodafone Plc. The company said it plans to raise fund through issuance of equity shares and/or convertible warrants on a preferential basis to one or more entities belonging to Vodafone Group (one of the promoters of the company).
VIL has been trying hard to raise funds for the past one-and-half years, but failed in that bid. Since it has failed to raise funds from external investors, it is looking for help from the promoters. VIL had set a target of Rs 25,000 crore from the market. Its promoters Vodafone Plc and Aditya Birla Group only infused Rs 4,500 crore as their equity contribution.
Therefore as the 5G spectrum auction nearing, the telco has no other option but to raise funds anyhow to participate in the bid. The CEO of VIL, Ravinder Takkar, recently said the telco is close to raising Rs 20,000 crore from external investors but it hasn’t been happening because the government is yet to finish the process of taking up equity in the company.
Once it is done, the investor might pick up stakes in the company. In January 2022, VIL opted to pay interest of nearly Rs 16,000 crore through preferential shares, which makes the government a 32% stakeholder in the company. Recently Bharti Airtel acquired an additional 4.7% stake in Indus Towers from Vodafone Group.
The deal was signed on the condition that Vodafone will use the proceeds to invest in cash-strapped Vodafone Idea and the latter will clear its pending dues with Indus Towers. Telecom experts believe Vodafone may not bid heavily in the upcoming auction.
After failed bids, VIL turns to promoters
New Delhi: VIL has been trying hard to raise funds for the past one-and-half years, but failed in that bid. Since it has failed to raise funds from external investors, it is looking for help from the promoters. VIL had set a target of Rs 25,000 crore from the market