Vodafone Idea (Vi) will issue preferential shares to the Aditya Birla Group entity Oriana Investments Ple Ltd. This issue will be to raise Rs 2,075 crore. It will be a part of the Rs 20,000 crore equity raise that the shareholders of the company have approved. Oriana Investments Ple Ltd will be given 1,395,427,034 equity shares of face value of Rs 10 each at an issue price of Rs 14.87 (including a premium of Rs 4.87 per equity share).
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The telco's board will get the votes from shareholders on May 8, 2024, for the move. This will be the Aditya Birla Group pitching in for the planned equity raise. However, Vodafone UK, another promoter of Vodafone Idea has already written off its investment in the Indian telco. The board has also approved an increase in authorised share capital from the existing Rs 75,000 crore (divided into Rs 70,000 crore equity share capital and Rs 5,000 crore preferential share capital) to Rs 1,00,000 crore (divided into Rs 95,000 crore equity share capital and Rs 5,000 crore preference share capital).
Vodafone Idea's promoter Aditya Birla Group pitching in with additional capital through one of its subsidiaries will boost the confidence of other investors and companies as well. The telco plans to raise a total of Rs 45,000 crore, out of which Rs 25,000 crore will be in debt and Rs 20,000 will be in equity. The telco will utilise the funds to expand the 4G networks and also place commercial orders for 5G equipment. Vodafone Idea will also be able to pay off upcoming statutory dues with the help of the money raised.
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Due to an inferior 4G network, Vodafone Idea has been losing customers to its private competitors Reliance Jio and Bharti Airtel. With network expansion, the telco will be able to add new users and retain the existing ones.
