Vodafone Idea gains after board approves share issue to Ericsson India, Nokia India

The stock of this telecom operator surged over 23 percent in the past 3 months, as compared to 5 percent rise in the benchmark Nifty 50 index

Shares of Vodafone Idea (VIL) surged by a percent to Rs 16.38 per share on June 14 after it approved issuing shares worth up to Rs 2,458 crore on a preferential basis to Ericsson India, Nokia India, and Networks India.

The stock of this telecom operator surged over 23 percent in the past 3 months, as compared to 5 percent rise in the benchmark Nifty 50 index. Earlier, Vodafone Idea had hit 52-week high of Rs 18 per share on January 1, 2024.

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The transaction will involve issuing shares of up to 166 crore fully paid-up equity shares of face value of Rs 10 each in one or more tranches. Of this, around 102.7 crore equity shares at an issue price of Rs 14.8 apiece will be issued to Nokia Solutions and Networks India, while Ericsson India will fetch around 63.3 crore equity shares of face value of Rs 10 each at an issue price of Rs 14.8 per share.

The board also approved convening of an extraordinary general meeting of the company July 10, 2024 to approve the above matters.

"Nokia and Ericsson both have a long-term partnership with VIL, as key suppliers of network equipment, and this preferential allotment will enable VIL to clear part of their outstanding dues. It further bolsters VIL’s capex rollout for building a top quality 4G & 5G network to contribute towards India’s digital transformation," said Vodafone Idea in an exchange filing.

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Post this preferential issuance, the shareholding of Nokia and Ericsson in the company will be 1.5 percent and 0.9 percent respectively. The promoters, ABG and Vodafone shareholding will stand at 37.3 percent and shareholding of Government of India will stand at 23.2 percent, while the balance 37.1 percent will be public shareholding.