Vodafone Idea Allots Shares Worth Rs 615 Crore to Nokia and Ericsson

Vodafone Idea, a telecom company, remains vital in serving over 219 million customers in India as a joint venture between the Vodafone Group and Aditya Birla Group. Vi is the third-largest mobile telecommunications company in India and the 12th largest mobile telecommunications network worldwide. As of 30th April 2024, Vi’s subscriber base stands at 219.08 million. The company’s primary products include cellular network and wireless broadband internet services.

Vi preferential shares deal with Vodafone and Nokia:

To clear dues with network vendors and to boost capital base, Nokia and Networks India and Ericsson, Vodafone Idea announced on Thursday that it is going to allot their shares preferentially. Vodafone Idea informed the exchanges on June 13 that its board has approved the issuance of about 166 crore shares at ₹14.80 per share to raise funds up to ₹2,458 crore preferentially. This move by Vi to raise funds through a preferential issue of equity shares to Nokia and Ericsson shows their commitment to strengthening their financial position and investing in their network infrastructure. By clearing part of their pending dues, Vi is not only improving its relationship with key vendors but also ensuring that it has the necessary resources to compete in the rapidly strengthening telecom market.The planned 4G expansion and 5G rollout are crucial for Vi to stay competitive and meet the growing demand for high-speed data services.Vi added that following this allotment, the telco’s paid-up share capital increased to Rs 684,540,864,730, comprising 68,454,086,473 equity shares with a face value of Rs 10 each.

Last month, Vi announced plans to raise up to Rs 2,458 crore through a preferential issue of equity shares to Nokia and Ericsson, for clearing part of their pending dues and setting the stage for the telco’s 4G expansion and 5G rollout. For a maximum of Rs 1,520 crore and Rs 938 crore, respectively, Nokia and Ericsson will take part. After the preferential issuance, Vi’s shares will be held by Nokia and Ericsson, 1.5% and 0.9%, respectively.

Vodafone Idea stock price:

Vi’s stock had a positive performance yesterday, but today it experienced a 2% decline because of the transfer of preferential shares to Nokia and Ericsson. There has been a decline in the stock’s performance during intraday trading.

Conclusion: Vi is trying to establish a stronger presence in the Indian mobile communication segment and is seeking to raise funds to ensure that vendors do not discontinue their services. They also need to focus on reducing losses.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.