Following a capital infusion by the business’s founders in March, Vodafone Idea Ltd said on Monday that its British stakeholder, Vodafone Group, would spend an additional 500 crore on the company.
In order to obtain a total of 20,000 crores in debt and equity from outside investors, India’s third-biggest telecom has received extra funding.
It was announced that a board meeting of Vodafone Idea would be held on Wednesday, June 22, 2022, to discuss a proposal to raise up to Rs. 500 crore through the issuance of equity shares and/or convertible warrants, with preference being given to one or more entities belonging to Vodafone Group (a company promoter).
On the BSE, Vodafone Idea’s shares fell 3.29 per cent to ₹7.94, while the Sensex rose 0.46 per cent to ₹51,597.84. On Friday, June 25, a trading window for dealing in securities of the firm is scheduled to resume for all authorised people after the end of the board meeting.
The amount of money that India’s third-largest telecommunications company plans to raise via loan and stock is still a tiny percentage of the total. Nevertheless, this is the second time since the government’s bailout package for the industry that Vodafone Idea promoters have invested in the stock.
It’s been over two years since the telecom has attempted to raise money to pay down its $1.98 trillion in debt, making it the industry leader in debt. Additionally, the corporation is seeking final clearance to convert its moratorium interest on spectrum-related dues into equity, making the government the company’s only shareholder.
According to experts, a change in the company’s ownership structure is expected as a result of a second stock injection from the company’s owners. A preferential equity injection of 24,500 crores to Vodafone Group firms Euro Pacific Securities and Prime Metals and Aditya Birla Group company Oriana Investments Pt. Ltd increased the promoter stake to 74.9 per cent from 72.05 per cent prior to the infusion.
The government has yet to authorise the conversion of its interest in dues into equity, after which it will control around 33% of the carrier, compared to 36% before, while the promoter shares will drop to 50%, and the rest of the public would own the balance. In spite of the fact that the investment is negligible, it might have a significant impact on lowering the government’s stake. Sector experts who asked not to be identified stated that raising more money from outside investors was still the most pressing issue.