Vodafone Idea shares tank 3% on approving Rs 14,500 crore fund-raising plan

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The board approved the preferential issuance of up to 3.38 billion equity shares
The issue price is Rs 13.30 per share
The board also agreed to call an EGM on March 26

Written By:Yash

Updated: March 03 2022 06:32:40 PM ET

Vodafone Idea shares declined 3% to Rs 10.75 on the BSE in Friday’s intra-day trade after the company’s board approved a proposal to raise funds up to Rs 14,500 crore through various means, including Rs 4,500 crore from promoter entities.

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The board approved the preferential issuance of up to 3.38 billion equity shares to promoters at an issue price of Rs 13.30 per share, amounting to Rs 4,500 crore.

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“Issuance of up to 3.38 billion equity shares of the face value of Rs 10 each at an issue price of Rs 13.30 per equity share (including a premium of Rs. 3.30 per equity share), which is at a 10% premium to the floor price of Rs 12.08 for an aggregate consideration of up to Rs 4,500 crore to Euro Pacific Securities Ltd. and Prime Metals Ltd. (Vodafone Group entities and promoters of the company), and Oriana Investments Pte. Ltd (Aditya Birla Group entity forming part of the promoter group),” the telco said in a stock exchange filing.

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The board also authorized the issue of up to Rs 10,000 crore in one or more tranches of equity shares or securities convertible into equity shares, Global Depository Receipts, American Depository Receipts, foreign currency convertible bonds, convertible debentures, and warrants.

The board also agreed to call an extraordinary general meeting of the company on March 26.

Bharti Airtel recently acquired a 4.7% stake in Indus Towers from Vodafone Group. The two companies agreed to execute an agreement under which Vodafone would utilize the revenues to invest in Vodafone Idea (Vi) and the latter will pay its outstanding debts with Indus Towers.

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In Q3FY22, Vodafone Idea recorded a consolidated net loss of Rs 7,230.9 crore, compared to a net loss of Rs 4,532.1 crore in Q3FY21. Revenue for the quarter was Rs 9,720 crore, a 3.3% increase from the previous quarter, supported by multiple price interventions, including the latest tariff hikes implemented by all operators in November 2021.