NEW DELHI: Vodafone Idea Limited (VIL), the country’s third-largest telecom service provider, on Tuesday announced its plans to raise funds worth nearly Rs 45,000 crore through a combination of equity and debt.
The company will raise Rs 20,000 crore via a combination of equity and/or equity-linked instruments. The fund will be utilised to expand its 4G network and rollout 5G network in the country, and to be in competition.
“Through a combination of equity and debt, the company plans to raise nearly Rs 45,000 crore,” said the company in an exchange filing.
The company, in an exchange filing, said it has also authorised the management to appoint various intermediaries, including bankers and counsels, to execute the fundraise. The telco will convene a meeting of its shareholders on April 2, 2024, and expects to complete the equity fundraise in the coming quarter post-shareholder approval.
The telco also said promoter (Aditya Birla Group) will also participate in the proposed equity raise, as committed earlier. In addition, the company remains engaged with its lenders for tying-up the debt funding, which follows the equity will fundraise.
Vodafone Idea, the loss-making joint venture between the UK’s Vodafone Plc and India’s Aditya Birla Group, has been struggling to raise funds for more than three years now. Due to the lack of capital, the company has been unable to stem its subscriber losses to its competitors, Reliance Jio and Bharti Airtel, and roll out its 5G services in the country. Its gross subscriber base shrank to 223.05 million at the end of December. According to the December quarter results, Vi’s net debt widened to Rs 2.14 lakh crore, while cash equivalents were at Rs 318.9 crore.
However, Vi’s dues to banks and other lenders have decreased by Rs 7,140 crore to Rs 6,050 crore between Q3FY23 and Q3 FY24. The company stated that its bank debt currently stood at less than Rs 4,500 crore.
“The fund will enable the company to make investments towards significant expansion of 4G coverage, 5G network rollout and capacity expansion. It will also improve its competitive positioning and offer an even better customer experience,” said the company.
“We believe these investments will enable the company to improve its competitive positioning in telecom sector and offer an even better customer experience and gain market share,” said Prashanth Tapse, Sr VP Research analyst at Mehta equities ltd.
4G/5G expansion
The fund will be utilised to expand its 4G network and rollout 5G network in the country, and to be in competition. The company will raise Rs 20,000 crore through a combination of equity and/or equity-linked instruments and rest through debt. Promoter Aditya Birla Group will also participate in the proposed equity raise