Vi gets board approval for raising `2,075 cr from Aditya Birla Group

DEBT-RIDDEN VODAFONE Idea on Saturday said its board has approved raising of Rs 2,075 crore from one of its promoters, Aditya Birla Group, and increasing its authorised share capital to Rs 1 trillion. The approvals are part of the company’s plans to raise Rs 20,000 crore of capital to fund its operations and lower its debt burden.

The company will seek shareholders’ approval at an extraordinary general meeting on May 8 on the proposals, it said in a regulatory filing.

The promoter’s infusion is part of Vodafone Idea’s broader two-part fundraising plan totaling Rs 45,000 crore through a mix of equity and debt. It plans to raise Rs 20,000 crore via equity by June-end, and follow that up with around Rs 25,000 crore from lenders.

The cash-strapped telcom

service provider expects the corpus will help repay vendors, strengthen its 4G network and fund the launch of 5G services to help compete with bigger and profitable rivals Reliance Jio and Bharti Airtel.

The Vodafone Idea board has approved “issuance of up to 1,395,427,034 equity shares of face value of Rs 10 each at an issue price of Rs 14.87 per equity share (including a premium of Rs 4.87 per equity share), aggregating to Rs 2,075 crore to Oriana Investments (Aditya Birla Group entity forming part of the promoter group), on a preferential basis”, the filing said.

The board also approved an increase in the authorised share capital of the company from existing Rs 75,000 crore, divided into Rs 70,000 crore equity share capital and Rs 5,000 crore preference share capital, to Rs 1 trillion, the filing said.

The increased authorised share capital of the company will be divided into Rs 95,000 crore equity share capital and Rs 5,000 crore preference share capital.

Of its total gross debt of Rs 2.15 trillion, over 90 per cent is owed to the government as spectrum dues. The company’s bank debt currently stands at less than Rs 4,500 crore.

In FY26, once the moratorium on regulatory dues is over, Vodafone Idea will have an obligation to pay around Rs 28,000 crore to the government. From FY27 onwards, Vodafone Idea will have a debt obligation of over Rs 41,000 crore to the government.

Based on the company’s free cashflow position, weakening of market share, and absence of fund raise, Vodafone Idea is expected to have a gap of Rs 30,000 crore FY27 onwards, according to analysts.

Vodafone Idea’s net loss for the October-december quarter narrowed to Rs 6,986 crore from Rs 8,738 crore in the preceding quarter. Revenue from operations rose 0.5 per cent year-onyear, owing to improvement in subscriber mix, 4G subscriber additions and increase in entry level tariffs.