Cash-strapped telco Vi or Vodafone Idea's shares on Friday closed at a 10% high on the BSE amidst speculation, which, as of the time of writing this article remains unconfirmed that the telco might be finally close to concluding part of its fundraising, at least as per market players.
On Friday, the stock of the company closed approximately 9.8% higher at Rs 10.36 post scaling an 11% intra-day high, fueled by rumours that the JV between UK-based Vodafone Plc and Aditya Birla Group might be close to a finish post initial funding of around $1 billion, due to potential qualified institutional placements or QIP route. Vi's shares have jumped over 21% over the course of June, from Rs 8.53 to Rs 10.36 in a span of 18 days.
Deven Choksey, the promoter of KRChoksey Wealth Managers stated to ET Telecom that markets these days largely run on expectations and euphoria with any near-term positive perceptions about Vi likely regarding its immediate funding challenges could have resulted in the sharp growth in the company stock price today.
Spokespersons for all three companies, namely Aditya Birla Group, Vodafone Plc and Vi did not reply to any queries put forth, with the telco yet to report its Q4 2020 results, which are expected to release at the end of June.
What Do We Know About Vodafone Idea's Fundraising Plans
In terms of the concerns regarding the Rs 25,000 crore for the fundraising plans for Vi, they have been steadily rising, primarily due to how the telco is yet to provide any details after talking to global investors which include the likes of an Oak Hill-led consortium, a host of US private equity firms including KKR, and Canada Pension Plan Investment Board, Caisse de Dépôt et Placement du Québec as well as Norway’s Government Pension Fund Global.
Industry executives, fund managers and executives have mentioned that Vi’s leadership is still discussing with US private equity players and that financial due work is underway.
Furthermore, the telcos has been unable to effectively increase their tariffs due to increase competition, despite facing big payment obligations which are upwards of Rs 13,500 crore in the current fiscal year.
The telco has also stated it is soon starting a Rs 6,000-crore payout towards the redemption of non-convertible debentures or NCDs from December 2021, with the first instalment of the company's Adjusted Gross Revenue or AGR supposedly being Rs 7,500 crore with a due date of March 31, 2022