Vodafone Idea might get capital from its second-largest promoter, the Aditya Birla Group (ABG). The chairman of the group, Kumar Mangalam Birla, might infuse some of his own capital soon in the company. At the same time, the Vodafone Group Plc is not expected to infuse anything. But according to an ET Telecom report, the Vodafone Group might sell a part of its stake in the Indus Towers and then use the proceeds to help out Vodafone Idea. However, the amount is expected to be lesser than Rs 10,000 crore coming from the promoter.
Vodafone Idea Promoters Need to Show Intent
The government has done its part in helping out Vodafone Idea. Now it is time for the promoters to show that they really believe in the company. If there’s no capital infusion from the promoters, no outside investor would be keen on giving his/her money to the company.
The relief package from the government has severely eased the cash flow problem of the telco. But now, the promoters need to ensure that such problems may never arrive. If the telco is able to get some funds from the promoters, it will further help with clearing a part of the debt, and also, the telco will be able to invest in its networks.
It is worth noting that Vodafone Idea still hasn’t been able to raise Rs 25,000 crores from the outside investors. The company’s board had approved the fundraising last year. But nothing has happened so far. The telco has blamed the environment that pertained in the industry. A tariff hike might help the telco in boosting revenues and improving the cash flow situation. This might attract some new investors to the company. However, nothing more will happen until the promoters show that they believe in the company and invest some of their own money. Hopefully, for Vodafone Idea, that happens soon.
