Vodafone Idea board approves equity fund raise of up to ₹20,000 crore

The Board of Directors of Vodafone Idea Ltd (VIL) approved a fund raise of up to ₹20,000 crore via a combination of equity or equity-linked instruments, the telecom firm informed exchanges on Tuesday, February 27.

VIL also added that the company remains actively engaged with its lenders for tying up the debt funding, which will follow the equity fundraise. It aims to raise around ₹45,000 crore through a combination of equity and debt. VIL's bank debt currently stands at less than ₹4,500 crore.

"The Board of Directors of the Company, at its meeting held today (i.e. February 27, 2024) has... approved raising of funds by way of issue of Equity Shares or by way of issue of any instrument or security... for an aggregate amount of up to ₹20,000 crores by way of a further public offer, private placement including preferential issue, qualified institutions placement, or through any other permissible mode or any combination thereof and in one or more tranches," the company said in an exchange filing.

The equity and debt fund raising will enable the Company to make investments towards significant expansion of 4G coverage, 5G network rollout and capacity expansion, the statement added.

The move comes days after Aditya Birla Group Chairman Kumar Mangalam Birla said that they are on the look out for new investors for Vodafone Idea. Birla made these remarks at the launch of Grasim's paints business. Birla made these remarks at the launch of Grasim's paints business.

Meanwhile, the telco reported on January 29 a net loss of ₹6,985.9 crore for the third quarter that ended December 31, 2023, while its revenue from operations increased 0.49% to ₹10,673 crore. At the operating level, EBITDA increased 4.1% to ₹4,180 crore in the third quarter of the current fiscal.

Vodafone Idea's 4G subscriber base continued to grow for the tenth successive quarter and stood at 125.6 million as of December 31, 2023, against 121.6 million in Q3FY23, an addition of 4.1 million 4G subscribers.

The overall subscriber base stood at 215.2 million. ARPU (average revenue per user) improved to ₹145, up 7.4% on a year-on-year basis against ₹135 in Q3 of FY23, primarily aided by a change in the entry-level plan and subscriber upgrades.

The Vodafone Idea share price settled nearly 4.5% lower in trade on Tuesday, quoting at ₹16.10 apiece on the NSE. In the last one year, the telco's share price has surged by over 136%.