Aditya Birla Group's Stake In Vodafone Idea Likely To Rise To 13% After Capital Infusion

The total promoter holding will also increase from 48.91% to nearly 50%.

<div class="paragraphs"><p>A Vodafone Idea store exterior. (Source: NDTV Profit)</p></div>
A Vodafone Idea store exterior. (Source: NDTV Profit)

Vodafone Idea Ltd. promoter Aditya Birla Group's stake in the telecom company is set to increase to over 13% following the infusion of proposed capital.

The group's total holding in the company was 10.59%, as of March 23, 2023.

On a consolidated level, Vodafone Idea is likely to witness an equity dilution of nearly 3% after the infusion of Rs 2,075 crore by promoters, according to calculations by NDTV Profit.

The total promoter holding will also increase from 48.91% to nearly 50%.

The board of Vodafone Idea is set to meet on Saturday to consider a proposal of issuance of shares/convertible securities worth Rs 2,075 crore to promoters, according to an exchange filing.

The calculations are based on minimum price guidelines for preferential allotment by the Securities and Exchange Board of India.

The cash-strapped telecom company had earlier approved a fundraise of Rs 45,000 crore via equity and debt. Of the total amount approved, Rs 20,000 crore will be via equity or equity-linked instruments.

The government stake in the company will also decrease from 32.19% to 31%, following capital infusion by promoters.

Last month, 14,400 Optionally Convertible Debentures issued to ATC Telecom Infrastructure Pvt. worth Rs Rs 1,600 crore were converted into equity shares.

Vodafone Idea Holds EGM To Seek Shareholders’ Nod To Raise Rs 20,000 Crore

Fresh funds will be used for new capex and the generation received from operations minus the old debt servicing will be used to pay vendors, Chief Executive Officer Akshaya Moondra said during the Q3 earnings conference.

Vodafone Idea will prioritise payment of vendor dues, even as it plans to roll out 5G in the next six to seven months, he said. Its competitors, Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd. have already rolled out 5G but the technology is yet to be monetised.

The struggling telecom major has Rs 5,400 crore dues payable by the end of March 2025. Of this, Rs 533 crore is the principal payment for spectrum, while Rs 3,200 crore is debt from banks and financial institutions.

The total gross debt, excluding lease liabilities and including interest accrued, stood at Rs 2.14 lakh crore, as of Dec. 31—90% of which is owed to the government.

The moratorium on AGR dues are set to be lifted from FY26, taking annual debt payment for the company to nearly Rs 30,000 crore.

Funding will be crucial for Vodafone Idea to meet these obligations and for the rollout of 5G.