Debt-ridden telecom firm Vodafone Idea on Saturday said its board has approved raising ₹2,075 crore from promoter Aditya Birla group and increasing its authorised share capital to ₹1 lakh crore.
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The company will seek shareholders’ approval at an extraordinary general meeting on May 8 on the proposals, it said in a regulatory filing.
The Vodafone Idea board has approved “issuance of up to 1,395,427,034 equity shares of face value of ₹10 each at an issue price of ₹14.87 per equity share (including a premium of ₹4.87 per equity share), aggregating to ₹2,075 crore to Oriana Investments Pte. Ltd (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 ₹75,000 crore, divided into ₹70,000 crore equity share capital and ₹5,000 crore preference share capital, to ₹1 lakh crore, the filing said.
The increased authorised share capital of the company will be divided into ₹95,000 crore equity share capital and ₹5,000 crore preference share capital.
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The company received shareholders nod for raising up to ₹20,000 crore by issuance of securities in an extraordinary general meeting (EGM) held on April 2. Vodafone Idea has plans to raise ₹45,000 crore through a mix of equity and debt as it seeks to match services offered by rivals Reliance Jio and Bharti Airtel and arrest an alarming and prolonged subscriber churn.
The fundraise will arm VIL to improve competitive positioning in the Indian telecom market, where it trails Jio and Bharti Airtel, by a wide margin.
In February this year, the company’s board approved raising up to ₹20,000 crore in equity from promoters and other investors by June, as it looked to shore up finances for the much-delayed 5G rollout and strengthening 4G services.
Vodafone Idea, in which the government now also holds over 33% equity stake, has been fighting a desperate battle for survival. It has a debt of ₹2.1 lakh crore, and is reporting quarterly losses due to falling subscriber base. Trai’s latest data showed that Vodafone Idea continued to bleed on the subscriber front.
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VIL lost 15.2 lakh wireless subscribers, plunging its mobile subscriber base to 22.15 crore in January, in sharp contrast to subscriber gains by Jio and Airtel.
