Vodafone Idea Announces ₹14,000 Crore Equity Infusion as Part of Revival Strategy
In a significant development, Vodafone Idea, a leading telecom company, witnessed a 10 percent surge in its shares on Wednesday. This surge came following reports in the media stating that the company has proposed an equity infusion of ₹14,000 crore as a crucial part of its revival strategy. According to sources familiar with the matter, the plan involves existing promoters, Aditya Birla Group (ABG), and UK’s Vodafone Group Plc, infusing half of the total amount.
On the Bombay Stock Exchange (BSE), Vodafone Idea shares experienced a notable rise of 9.98 percent, reaching a high of ₹8.48. Subsequently, the stock settled at ₹8.15, representing a 5.71 percent increase. Over the past month, the company’s stock has seen a remarkable climb of 15 percent.
The proposal was submitted to the government earlier this month, and as part of the plan, ABG and Vodafone Group are expected to invest ₹2,000 crore as fresh equity in the company. It is worth mentioning that since the government’s telecom revival package was announced in September 2021, the promoters have already invested ₹5,000 crore as fresh equity.
Furthermore, the report suggests that the promoters will collaborate with the company to raise an additional ₹7,000 crore from external investors. This capital infusion will either be in the form of direct equity or through convertible structures.
In a positive turn of events, Kumar Mangalama Birla, the chairperson of Aditya Birla Group, rejoined the board of Vodafone Idea as an additional director (non-executive and non-independent) on April 20. This move has contributed to the positive sentiment surrounding the telecom stock.
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Recent data reveals that mutual funds have increased their holdings in Vodafone Idea, with a rise from 20.48 crore shares in April to 28.64 crore shares in May. Mutual fund managers currently manage ₹206 crore worth of Vodafone Idea shares as of May 31, compared to ₹142 crore as of April 30.
The proposed equity infusion of ₹14,000 crore, along with the active involvement of existing promoters and external investors, showcases Vodafone Idea’s commitment to implementing a comprehensive revival strategy. These developments are expected to have a significant impact on the future prospects of the company in the highly competitive telecom sector.
About Vodafone Idea:
Vodafone Idea, also known as Vi, is an Indian mobile network operator. It is headquartered in Mumbai and Gandhinagar. Vi provides a comprehensive range of services including 2G, 3G, 4G, LTE Advanced, Voice Over LTE, and VoWiFi across India.
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