Home >Industry >Telecom >Vodafone Idea board approves up to 25,000 crore fund-raising plan

Vodafone Idea posted a loss of  ₹25,460 crore in the first quarter.
Vodafone Idea posted a loss of 25,460 crore in the first quarter.

2 min read

. Updated: 04 Sep 2020, 07:54 PM IST


Edited By Anulekha Ray

  • The company owes 58,254 crore to the Department of Telecommunications
  • Vodafone Idea posted a loss of 25,460 crore in the first quarter

Vodafone Idea board on Friday approved up to 25,000 crore fund-raising plan through share sale and debt, according to a statement released by telecom giant. The board of debt-ridden telecom firm approved raising up to 15,000 crore by either issuing equity shares, Global Depository Receipts, American Depository Receipts, foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants” the company said in statement.

Vodafone Idea board also decided to “issue of unsecured and/or secured, non-convertible debentures up to an aggregate amount of 15,000 crore, by way of public offering or private placement basis or otherwise, in one or more tranches.” “The total raising of funds shall not exceed 25,000 crore,” the company said in BSE filing.

Vodafone Idea posted a loss of 25,460 crore in the first quarter. The decline in ARPU in the June quarter to 114 was due to lower recharge of tariff plan by customers in the wake of COVID-19 outbreak.

The company owes 58,254 crore to the Department of Telecommunications in licence fee, spectrum usage charges, interest and penalties. Of this, it has already paid 7,854 crore. The Supreme Court earlier asked telcos to pay 10% of the AGR dues upfront and has set a 10-year payment timeline for the rest of the amount.

Analysts at Motilal Oswal in a note said, “Vodafone should be able to manage the cash flow requirement in FY21 without a price hike, considering that it has a total 14100 crore cash requirement in 9MFY21, including capex of 6400 crore and an upfront amount of 5800 crore for AGR, along with cash interest cost of 1900 crore,against 5100 crore of operating cash flow(OCF), 7100 crore from Vodafone PLC, and 4000 from the Bharti Infratel stake sale. Hence, to offset the cash requirement, it would have to take of 22% price hike to manage the funding requirement. The company may require a huge round of price hike, along with a capital raise, to offset the gap”.

Earlier on Friday, shares of Vodafone Idea extended their gains to the third straight session. The scrip jumped 51.29% to its fresh 52-week high of 13.45 on September 4 from 8.89 on September 1. But, it closed 4.4% lower at 12.01.

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