Vodafone Idea share, fund raise: Shares of Vodafone Idea surged 2.6% to hit the day’s high at Rs 8.30 per share on Tuesday, December 10 after the debt-ridden telecom company’s Board gave its approval for raising Rs 1980 crore from its promoter Vodafone Group Plc by issuing fresh equity on a preferential basis.
The UK parent had sold its residual 3% stake in Indian telecom tower unit Indus Towers last week. The funds will likely be used by the company to clear a portion of its dues to Indus Towers. Vodafone Idea, however, did not specify details about its plans to use the funds.
As of the end of September, Vodafone Idea’s total debt stood at Rs 2.16 lakh crore, which includes deferred spectrum payment obligations to the government.
Vodafone Idea was formed by a merger between the Indian arm of the UK’s Vodafone Group and Aditya Birla Group’s Idea Cellular in 2018.
Vodafone Idea Fund Raise Approval
Vodafone Idea’s board of directors approved the issuance of up to 176 crore equity shares at a price of Rs 11.28 per share. This is a 40% premium to the December 9 closing price of Rs 8.11.
The shares will be issued to two Vodafone group entities – Rs 1,280 crore to Omega Telecom Holdings Pvt Ltd and Rs 700 crore to Usha Martin Telematics Ltd, as per the company’s exchange filing on Monday.
With this deal, Vodafone group’s holdings in Vi will go up by 2.45 percentage points, while those of its other shareholders, including JV partner, India’s Aditya Birla Group (ABG), and the government, will reduce proportionately.
The company has so far raised about Rs 24,000 crore in this year.
Vodafone Idea Share Latest News
In other news, Tejas Networks has signed a three-year contract with Vodafone Idea to supply its TJ1400 and TJ1600 packet and optical transmission products. These will enhance Vodafone Idea’s backhaul capacity and improve network performance across various telecom circles in the country, said the Tata group company in an exchange filing.
Tejas Networks designs and manufactures high-performance networking products for telecommunications, internet service providers, utilities, defense, and government entities in over 75 countries. It is part of the Tata Group, with Panatone Finvest Ltd., a subsidiary of Tata Sons Pvt. Ltd., as the majority shareholder.
Vodafone Idea Share Price History
In the past few months, Vodafone Idea shares have seen sharp correction of over 65% from its 52-week high of Rs 19.18 to its 52-week low of Rs 6.61 per share. However, the telecom stock has recovered around 25% from its 52-week low.
On an year-to-date (YTD) basis, it has delivered a negative return of 52% as against Sensex’s 13% return in the same time period. Over the past five years, its yielded 23.5% return against Sensex’s 1-2.85% return.
The article originally appeared on ET NOW.
