Vodafone Idea Aims to Retain the Top Position by Raising $1 Billion

The UK based Vodafone Group Plc, and its local partner Idea Cellular announced that they would be exploring the options of Private Equity (PE) and pension funds to raise about $1 billion. This move will be followed by fundraising worth of $2.5 billion which Vodafone Idea will raise through a right issue to Vodafone Idea Ltd. As per a Live mint report, three people aware of the matter said, “There has been an initial round of talks with some potential investors.” One of the persons said, “Some of the investors have said that they wish to see the overall leverage of Vodafone Idea come down significantly before committing to potential investment.”

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They further added to their words saying, “However there is interest among several large investors, who feel that India’s telecom industry which has witnessed a bitter tariff war with the entry of Reliance Jio (Infocomm Ltd) may be heading for a truce.”

Vodafone Idea to Invest Heavily to Retain Top Position

As per the information available, Vodafone Idea Ltd remains under a staggering debt of Rs 1.2 trillion in September, whereas, the debt of Bharti Airtel stands at Rs 1.15 trillion. According to the industry experts, however, the market leader will need to shore up its debt while at the same time spend on its 4G network capacity to stay ahead of others and maintain its top position in the telecom industry.

The second person out of the three said under anonymity, “Vodafone group plans raise the entire $1.5 billion (the UK company’s share in the capital infusion) by pledging its stake in Indus Towers Ltd, which is in the midst of a merger with Bharti Infratel Ltd.”