Vodafone Idea Plans To Raise Rs 45,000 Crore Through Equity And Debt

Vodafone Idea revealed its intention to secure Rs 20,000 crore through a blend of equity or equity-linked instruments, with the remainder to be sourced through debt

Vodafone Idea has slated a shareholder meeting for April 2, 2024, seeking approval for the fundraising endeavour.

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Vodafone Idea's board has greenlit a fundraising initiative to the tune of Rs 45,000 crore through a mix of equity and debt, as disclosed by the telecom giant in an exchange filing on Tuesday. The company revealed its intention to secure Rs 20,000 crore through a blend of equity or equity-linked instruments, with the remainder to be sourced through debt. Promoters are also poised to participate in the proposed equity infusion.

Vodafone Idea has slated a shareholder meeting for April 2, 2024, seeking approval for the fundraising endeavour. Following shareholder consent, the company anticipates concluding the equity fundraising within the ensuing quarter.

Laying out its strategic road map, Vodafone Idea reiterated its commitment to engage with lenders post-equity fundraising to finalise debt funding arrangements. The combined infusion of equity and debt is expected to total approximately Rs 45,000 crore, with the company's current bank debt standing at less than Rs 4,500 crore.

The infusion of funds is earmarked for bolstering 4G coverage, facilitating the rollout of 5G networks, and expanding capacity. Highlighting the significance of these investments, Vodafone Idea asserted that they would enhance the company's competitive stance and elevate customer experience standards. Additionally, the board has empowered management to enlist various intermediaries, including bankers and counsels, to oversee the fundraising process.

Vodafone Idea's decision to pursue fundraising comes on the heels of notable improvements in operational metrics. The company has achieved consecutive growth in its 4G subscriber base and Average Revenue Per User (ARPU) over the past 10 quarters. Furthermore, Vodafone Idea remains steadfast in delivering competitive data and voice services across its operational footprint, complemented by an array of digital offerings.

Buoyed by the news of the fundraising initiative, Vodafone Idea's shares saw a 4 per cent uptick over the past five sessions. However, the stock settled 4.45 per cent lower at Rs 16.1 on the National Stock Exchange on February 27. On the BSE, shares of the telco closed at Rs 15.87 apiece, down 5.93 per cent on Tuesday.

Vodafone Idea, a joint venture between the Aditya Birla Group and Vodafone Group, is a leading provider of pan-Indian voice and data services spanning 2G, 3G, and 4G platforms.