Vodafone Idea is likely to go for a combination of follow-on public offer (FPO) and preferential allotment to promoter for its Rs 20,000-crore equity fundraise, reported CNBC-TV18 on February 28 quoting sources.
Aditya Birla Group’s promoter entity may infuse funds through preferential allotment of shares, reported the channel.
Meanwhile, the telco's scrip on BSE was trading 12% lower on Wednesday at Rs 13.9.
Vodafone Idea on Tuesday said its board has approved raising up to Rs 20,000 crore in equity from promoters and other investors by June as it looks to shore up finances for much delayed 5G roll out and strengthening 4G services.
The debt-laden firm, where the government also holds just over 33% equity stake, plans to raise Rs 45,000 crore through a mix of equity and debt with hopes of matching services offered by rivals Jio and Bharti Airtel.
On Tuesday, Vodafone Idea said its board has approved fundraise of up to Rs 20,000 crore via a combination of equity and/or equity-linked instruments, but stopped short of naming any new investor.
It also did not specify just how much would the promoters inject as capital into the company.
The VIL board has also authorised the management to appoint bankers and counsel to execute the fundraise.
VIL will call for a meeting of its shareholders on April 2, 2024 and post-shareholder nod it expects to complete the equity fund raise in the coming quarter.
The promoters will also participate in the proposed equity raise, as committed earlier, the company said.
Last week, billionaire industrialist and Aditya Birla Group Chairman Kumar Mangalam Birla underlined the group’s firm commitment to the cash-strapped telco and asserted that efforts are on to rope in external investors.
VIL has been struggling to raise capital for the past several quarters, with the cash crunch impacting its ability to invest, expand and even settle vendor dues. Its woes have been compounded by continuous loss of subscribers.
The government is now the biggest shareholder in the company after it allowed VIL to convert dues of around Rs 16,000 crore into equity.
With inputs from PTI
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
