Vodafone Idea, Fund Raise, Share Holders, Stock Market, Fund, Capital
Vodafone Idea Ltd (VIL) shareholders have greenlit a proposal to raise up to Rs 20,000 crore through the issuance of securities. The approval was granted during an extraordinary general meeting (EGM) held on Tuesday, where 99.01 per cent of the votes were cast in favor of the resolution.
The objective of the Fundraise
The move comes as VIL aims to raise a total of Rs 45,000 crore through a combination of equity and debt. The company seeks to bolster its financial position to match the offerings of competitors Reliance Jio and Bharti Airtel and mitigate a persistent decline in subscriber numbers.
Enhancing Competitive Positioning
With the approved fundraise, Vodafone Idea intends to enhance its competitive standing in the Indian telecom market, where it currently lags significantly behind Jio and Bharti Airtel. The capital injection will provide the company with resources to strengthen its services and potentially initiate the long-awaited 5G rollout.
Previous Board Approval
In February of this year, VIL’s board had already sanctioned a plan to raise up to Rs 20,000 crore in equity from promoters and other investors by June. This decision was made in anticipation of the costly 5G rollout and the need to fortify existing 4G services.
Financial Struggles and Subscriber Losses
Vodafone Idea has been grappling with significant financial challenges, including a staggering debt of Rs 2.1 lakh crore. The company has been consistently reporting quarterly losses and witnessing a continuous decline in its subscriber base.
According to the latest data from the Telecom Regulatory Authority of India (Trai), VIL lost 15.2 lakh wireless subscribers in January alone, bringing its mobile subscriber base down to 22.15 crore. This decline starkly contrasts with the subscriber gains observed by competitors Jio and Airtel.
