NEW DELHI: Vodafone Idea’s board on Tuesday approved a fundraise of up to Rs 20,000 crore through a combination of equity and equity-linked instruments. Apart from this, the company is also looking to raise an additional Rs 25,000 crore through debt, thereby taking the total fundraise to Rs 45,000 crore through a combination of equity and debt.
Earlier, the company had raised Rs5,000 crore from promoters and received commitment of another Rs2,000 crore last year. The Rs2,000-crore funds will form part of the Rs20,000-crore equity fundraise.
Vodafone Idea said its promoters will also participate in the proposed equity raise, as committed earlier. It has called a meeting of its shareholders on April 2 to seek approval for the fundraise exercise, after which it expects to complete the equity fundraise in the coming quarter. Vodafone Idea said the board has authorised the management to appoint various intermediaries, including bankers and counsels to execute the fundraise.“The company remains actively engaged with its lenders for tying up the debt funding, which will follow the equity fundraise.
The equity and debt fundraising will enable the company to make investments towards significant expansion of 4G coverage, 5G network rollout and capacity expansion,” Vodafone Idea said in a statement. “These investments will enable the company to improve its competitive positioning and offer an even better customer experience,” it added. Of its total gross debt of Rs 2.15 trillion, over 90% is owed to the government as spectrum and AGR dues.
The company’s bank debt currently stands at less than Rs 4,500 crore. Vodafone Idea was expecting to finalise a fundraise plan by December 2023, which did not materialise. Its focus is to tie-up equity investments first, basis which banks will lend to the company, its chief executive officer Akshaya Moondra had said in October last year.
“The proposed fundraise follows a marked improvement in operating metrics. The company has managed to grow its 4G subscriber base and Arpu consecutively for the last 10 quarters,” Vodafone Idea said, adding that it is confident of effectively competing in the market. In FY26, once the moratorium on regulatory dues is over, the company will have an obligation to pay around Rs 28,000 crore to the government. From FY27 onwards, Vodafone Idea will have a debt obligation of over Rs 41,000 crore to the government. Based on the company’s free cash flow position, weakening of market share, and absence of fundraise, Vodafone Idea is expected to have a gap of Rs 30,000 crore FY27 onwards, according to analysts.
Vodafone Idea’s net loss for the October-December quarter narrowed to Rs 6,986 crore from Rs 8,738 crore in the preceding quarter. Revenue from operations rose 0.5% year-on-year, owing to improvement in subscriber mix, 4G subscriber additions and increase in entry level tariffs.
Source: The Financial Express
