Vodafone Idea to Raise Rs.2,075 Cr via Preferential Allotment of Shares to AB Group

Vodafone Idea announced that its board has approved a plan to raise up to Rs.2,075 crore through a preferential share issue to Oriana Investments, an entity of the promoter Aditya Birla Group. This decision was conveyed via a regulatory filing, confirming the issuance of 139.54 crore equity shares to Oriana Investments Pte Limited.

Share Issue and Capital

The equity shares are being issued at a face value of Rs.10 each, with an issue price of Rs.14.87 per share. This price includes a premium of Rs.4.87 per equity share. The total fundraising through this preferential basis sums up to Rs.2,075 crore. Following this allotment, the paid-up equity share capital of Vodafone Idea will increase from Rs.66,483.45 crore to Rs.67,878.88 crore.

Recent Fundraising Efforts

This preferential share issue is part of Vodafone Idea’s broader strategy to raise Rs.45,000 crore through debt and equity to manage its substantial debt. Recently, the company raised around Rs.18,000 crore through a follow-on public offer (FPO) that concluded on April 22.

Financial Performance and Market Response

In Q4FY24, Vodafone-Idea reported a net loss of Rs.7,674 crore, compared to a net loss of Rs.6,418.9 crore in Q4FY23. Revenue from operations slightly increased to Rs.10,606 crore from Rs.10,531 crore Y-o-Y. The company’s average revenue per user (ARPU) showed marginal growth, rising to Rs.146 from Rs.145 in the previous fiscal year.

Stock Performance

Vodafone Idea’s stock has seen significant growth, gaining over 95% in the last year. On May 21, the stock closed 2.26% higher at Rs.13.60.

Conclusion: Vodafone Idea’s approval to raise Rs.2,075 Cr through a preferential share issue marks a significant step in its efforts to address its debt burden. Coupled with the recent successful FPO, this fundraiser brings out confidence in the company’s strategic initiatives despite challenging financial performance.

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.