Vodafone Idea Investors May Dilute Stake

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Vodafone Idea

The current owners of the Vodafone Idea (Vi) - Vodafone Group Plc and the Aditya Birla Group are ready to transfer control of the company to an interested investor if any. The telco’s initial plan of getting an investor hasn’t been successful yet. Both the promoter groups are currently in talks with potential investors including three US-based funds. The aim is to sell a bundle of the convertible as well as equity shares of Vodafone Idea to raise money so that the cash-strapped telco can pay off its debts and continue with the expansion of its networks in India. As per a HindustanTimes report, the promoters are ready to transfer control of the company if there’s a potential investor ready to take the lead.

Vodafone Group Plc and Aditya Birla Group Ready to Take the Back Seat

For the unaware, the Vodafone Group Plc owns a 45% stake in the company while the Indian promoter group that includes Kumar Mangalam Birla and Aditya Birla Group firms have a 26% stake in the company.

As per the publication, both the promoters are ready to sell their majority stake to an interested investor who can take control of the company and potentially run it smoothly. But this will only happen if the interested investor is ready to pay the premium on the current market price of Vodafone Idea.

As of now, Vodafone Idea’s current market value stands at Rs 24,000 crores. In case the equity deal worth $2 billion (Rs 15,000 crores approximately) takes place at the current stock price, it would dilute the promoters' holdings by 62.5%. This would result in Vodafone Group’s stake in the company coming down to 28% and Aditya Birla Group’s stake dipping to around 16.25%.

The stock price of Vodafone Idea saw a negative hit post the announcement of the Supreme Court’s decision on the Adjusted Gross Revenue (AGR) dues rectification of errors. Note that nothing’s confirmed officially by the company.

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