Ailing telecom operator Vodafone Idea is set to get around Rs 2,000 crore funds boost with the company's board of directors approving a preferential share issue.
Under the approved plan, Vodafone Idea will issue up to 175.53 crore equity shares at an issue price of Rs 11.28 a share, for an aggregate consideration of Rs 1,980 crore on a preferential basis.
Shares worth up to Rs 1,280 crore will be issued to Omega Telecom Holdings and Usha Martin Telematics will be issued shares worth Rs 700 crore, both Vodafone group entities.
Post this preferential share allotment, Omega Telecom's shareholding in the country's third largest telecom operator will go up to 1.98 per cent from 0.40 per cent. The shareholding of Usha Martin Telematics will be increase to 1 per cent from 0.13 per cent.
The issue price is Rs 11.28 a share. On Monday Vodafone Idea's shares closed down 0.25 per cent at Rs 8.10 on the BSE.
Prior to this fund raise, the company had raised Rs 24,000 crore in 2024. This included a Rs 18,000 follow-on share sale and fund raising via preferential share issue to promoters and equipment suppliers.
The company has been in talks with lenders to raise an additional Rs 25,000 crore. The company has been focusing over the last few months on increasing its 4G data coverage and 4G population coverage. It has also earlier outlined plans to launch 5G in the current financial year. In this backdrop, the funding from banks will be extremely crucial for the company.
Recently, the Union cabinet had approved waiving off bank guarantees telecom companies need to submit towards past spectrum purchases. Vodafone Idea is likely to be the biggest beneficiary of this move. The company's bank guarantee needs are estimated to be around Rs 24,000 crore.
