Vodafone Idea announced a significant fundraising effort, securing ₹2,458 crore through a preferential share allotment. The company plans to issue approximately 166 crore equity shares at ₹14.80 each to Nokia Solutions and Networks India and Ericsson India, key vendors and long-term partners.
The price of these shares is set at a 35% premium to their recent public offer price, and the shares come with a six-month lock-in period. Nokia and Ericsson are set to invest ₹1,520 crore and ₹938 crore respectively, pending approval at an upcoming extraordinary general meeting scheduled for July 10, 2024.
This financial move aims to address some of the outstanding payments Vodafone Idea owes to these vendors. Following the transaction, Nokia and Ericsson will hold 1.5% and 0.9% stakes in Vodafone Idea, respectively. Meanwhile, the promoter shareholding (Aditya Birla Group and Vodafone) will remain at 37.3%, with the government of India holding 23.2%.
This capital raise is part of a broader equity increase by Vodafone Idea, totaling around ₹24,000 crore. This sum includes previous fundraising activities such as the conversion of optionally convertible debentures by ATC India and earlier preferential issues to promoters.
With this new capital, Vodafone Idea plans to enhance its 4G network and introduce 5G services. The company is also negotiating to secure additional debt funding worth ₹25,000 crore. Despite these developments, Vodafone Idea’s stock has fallen nearly 5% this year but has risen over 105% in the past year.
