• Vodafone Idea receives Rs 436 crore in funding from Vodafone Group

    Business

    The issue price of warrants will be Rs 10.20, and 100% of the issue price will be paid upfront at the time of warrant subscription. Each warrant would be convertible into one equity share, and the warrant rights could be exercised at any time during the first 18 months after allotment.


    Digital Desk: Vodafone Idea, a joint venture between Vodafone Group and the Aditya Birla Group, will raise Rs 436.21 crore from its UK parent at Rs 10.20 per unit in order to invest in its network and prepare for the upcoming spectrum auctions.

     

    The squandering In a filing to the Bombay Stock Exchange, the telco stated that its board of directors had approved the fund raising "by way of either: (a) up to 42,76,56,421 Equity Shares of the face value of Rs. 10/- each; or (b) up to 42,76,56,421 Warrants convertible into Equity Shares, to Euro Pacific Securities Ltd. (a Vodafone Group entity and promoter of the Company), on a preferential basis."

     

    The issue price per equity share will be Rs. 10.20 if the funds are raised through the issuance of equity shares. (including a Re. 0.20 premium per equity share).

     

    The issue price of warrants will be Rs 10.20, and 100% of the issue price will be paid upfront at the time of warrant subscription. Each warrant would be convertible into one equity share, and the warrant rights could be exercised at any time during the first 18 months after allotment.

     

    At the close of trading, Vodafone Idea NSE -1.17 percent rose 0.71 percent to Rs 8.53. The announcement came after the market had closed.

     

    The board also agreed to call an extraordinary general meeting on Friday, July 15, 2022, to seek shareholder approval for the aforementioned preferential Issue.

     

    The telco announced earlier this week that it plans to raise up to Rs 500 crore from its UK promoter.

     

    The Vodafone Group sold a 7.1 percent stake in Indus Towers in February and March, 2.4 percent in a block deal and 4.7 percent to Bharti Airtel, raising approximately Rs 3,831 crore. It invested Rs 3,375 crore in Vodafone Idea through the purchase of newly issued shares. Vodafone Idea used the proceeds to partially settle outstanding payments to Indus Towers.

     

    According to analysts, Vodafone Group's new fund infusion will be funded by the remaining proceeds from its Indus Towers stake. So far, Vodafone Idea has raised a total of Rs 4,500 crore through the issuance of new equity, with the remainder coming from the Indian promoter.

     

    The indebted The telco desperately needs money to invest in its network and participate in the upcoming spectrum auctions in late July. Aside from the funds provided by the promoters, the loss-making telco intends to raise another Rs10,000 crore in equity from an external investor and arrange a similar amount of debt from its lenders.

     

    However, the process is flatlined until the government converts the company's accumulated dues interest into 33 percent equity. The conversion and equity issuance should be completed soon.

    Under a government relief package for the telecom industry, Vodafone Idea chose to defer payment of its adjusted gross revenue (AGR) and spectrum dues to the government for four years. The telco has also chosen to convert the interest on the deferred dues into government equity, resulting in a 33 percent stake in the company. The government will be the largest shareholder, but the promoters - UK's Vodafone Plc and India's Aditya Birla Group - will own 50% of the company.

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