Vodafone Idea will raise Rs 20,000 crore to save the sinking ship, gets approval from shareholders – PressNews24

Vodafone-Idea Ltd in a BSE filing informed about the voting results of the EGM, where 99.01 per cent of the total votes cast supported the resolution related to “issuance of securities up to an aggregate amount of Rs 20,000 crore”.

The approval is in line with the company’s action plan to raise Rs 45,000 crore through a combination of equity and debt. The investment of funds will enable it to provide competitive services like its rivals Reliance Jio and Bharti Airtel, besides working on retaining its customer base.

This fundraise will prove to be a touchstone for VIL to strengthen its position in the market and remain relevant as a service provider. The market is currently dominated by two players – Jio and Bharti Airtel, with VIL lagging behind by a large margin.

In February this year, the telco’s board agreed to raise funds by raising Rs 20,000 crore in equity from promoters and other investors by June, aimed at strengthening finances for the delayed 5G rollout and improving 4G services.

Bail:

Troubled Vodafone Idea, which has suffered a blow from entrant Jio, is gasping for survival. In 2022, in an effort to bail out cash-strapped VIL, the government announced a rescue package, which was later agreed to by Indian market regulator SEBI. The government has proposed to convert over $1.92 billion of dues of telecom operator Vodafone Idea into equity.

The government holds more than 30 per cent stake based on the conversion, giving the likes of Vodafone Group and Aditya Birla Group a stake in the company.

Decreasing members:

TRAI’s latest data shows the desperation for Vodafone Idea to raise funds as it continues to lose customers.
As 15.2 lakh wireless subscribers left VIL, the number of mobile subscribers dropped to 22.15 crore in January – its operational metrics arresting a sharp contrast to the subscriber gains by Jio and Airtel.