Vi’s Rs 2000 crore preferential issue to kickstart larger infusion plan
Vodafone Idea (Vi) board approved a preferential share issue to raise Rs 2,075 crore from an Aditya Birla Group (ABG) entity, setting the stage for a wider funding programme critical to the revival of the cash-strapped telco. The shares will be issued at Rs 14.87 apiece to Oriana Investments Pte Ltd, Vodafone Idea said in a notice to the stock exchange on Saturday.
The stock issuance will be at a premium to the closing price of Rs 13.32 on the BSE on Friday, which gave the company a market cap of Rs 64,841.52 crore. The relevant date for determining the floor price of the preferential issue will be April 8.
Vodafone Idea was formed by the merger of Aditya Birla Group’s Idea Cellular and the India unit of Vodafone Plc in 2018. The board also approved an increase in authorised share capital to Rs 1 lakh crore from Rs 75,000 crore.
“A Rs 2,075 crore equity infusion by the Aditya Birla Group won’t be enough for Vi, but it definitely signals promoter confidence in the telco and their intent to save the company,” said Rohan Dhamija, head, India and the Middle East, Analysys Mason.
“This could pave the way for other equity investors to buy into Vodafone Idea and the increased authorised capital seems clearly aimed at accommodating more equity investors.”
The UK’s Vodafone Group Plc has previously said it will not plough fresh equity into the venture, having already written off its investments in the loss-making Indian telco.
The Indian government is the largest shareholder in Vi, with a stake of more than 33%, which
