Vodafone Idea To Consider Rs 2,000 Crore Fundraising

Vodafone Idea announced on Wednesday that its board will meet on Dec. 9 to discuss a proposal to raise up to Rs 2,000 crore by issuing equity shares or convertible securities on a preferential basis to entities within the Vodafone Group.

This proposed fundraising will be part of the board's regular proceedings to address financial matters, as stated in a notification to the exchanges.

This news follows the announcement that the British telecom operator Vodafone Group Plc plans to divest its entire 3% stake in Indus Towers Ltd. through open market transactions. Indus Towers, which is India's largest mobile tower installation company, became a subsidiary of Bharti Airtel Ltd. in August after a buyback of shares. As of September, Bharti Airtel, led by Sunil Bharti Mittal, held a 50% equity stake in the company.

Vodafone's Adjusted Gross Revenue dues amount to Rs 70,300 crore, while its cash balance is Rs 13,620 crore. In comparison, Bharti Airtel's dues are approximately Rs 44,000 crore, and Reliance Jio's dues are negligible.

Due to delays in its debt funding plan, the management is heavily relying on receiving relief from the government to convert a significant portion of their statutory dues into equity. However, this strategy carries a considerable risk, as the Indian government has not yet committed to this conversion.

On Wednesday, Vodafone Idea shares ended a two-day losing streak, closing 2.6% higher at Rs 8.42; however, the stock has declined by 36% over the past 12 months. Among 22 analysts tracking the company, four maintain a 'buy' rating, five recommend a 'hold,' and 13 suggest 'sell,' according to Bloomberg data.