The second major stakeholder of Vodafone Idea, Aditya Birla Group, is not utilising its power to buy shares of Vodafone Idea from the co-promoter, Vodafone Group and increase its 27.66% stake. The option to buy shares of Vodafone Idea is granted under the existing shareholder pact. Aditya Birla Group (ABG) has the power to buy additional shares of Vodafone Idea at Rs 130 per share from Vodafone Group to raise its stake in the telco to 35.5% within three years of closure of the partnership between Vodafone India and Idea Cellular. Not only this, but ABG can also purchase the shares at the existing Vodafone Idea stock in the fourth year of merger closing.
Aditya Birla Group Eyeing for Vodafone Idea’s Survival
As reported by ET Telecom, if the equalisation of stakes defaults even in four years, Vodafone Group can sell its holdings to reach Aditya Birla Group’s level Vodafone Group currently holds 44.39% stake in Vodafone Idea. One of the unknown officials aware of the matter told that Aditya Birla Group is not planning to boost its ownership but keep Vodafone Idea alive by signing the pending fundraising plans to elevate the 4G operations and lower the financial debt.
Aditya Birla Group and Vodafone Group Might not Infuse Fresh Equity in Vodafone Idea
Vodafone Idea is extensively working to bag Rs 25,000 crores from fundraising events. However, the telco has failed to secure the deal to date. One of the speculations that have surfaced on the internet is that if ABG had surplus cash reserves to buy a stake in Vodafone Group, it would rather invest the amount in the telco to lower the financial distress. However, both Vodafone Group and Aditya Birla Group might not infuse fresh equity in Vodafone Idea. One of the major reasons that could justify the reluctance of Aditya Birla Group to increase its stake in Vodafone Idea is the massive AGR burden and a handful of cash reserves. In total, Vodafone has to pay Rs 58,254 crore towards AGR dues, and the telco just sits on Rs 350 crore cash reserve. To date, Vodafone Idea has just paid around Rs 7,800 crore towards AGR dues.