Vodafone Idea (Vi), the third-largest telecom operator trying to survive and raise funds, might get an investment from Hong Kong under Foreign Direct Investment (FDI) route. In 2021, as a way of bringing reforms for the telecom sector, the Indian government had allowed the telcos to get 100% of FDI through the automatic route. However, there was a condition. If the telecom sector was to get an investment from any country that shares land border with India, then special approval from the government would be required.
Vodafone Idea Wants to Understand Whether It Can Take Investment from Hong Kong
Vodafone Idea (Vi) wants to understand from the government whether Honk Kong would be considered as a country that shares land border with India. It is unclear for the telco whether it can get 100% of FDI through the automatic route from Hong Kong, said a report from The Hindu BusinessLine.
Vodafone Idea might be in the process of raising funds from a Honk Kong-based company or group and just wants to understand how it can happen. The cash-strapped telco is looking to raise funds via external investors as well as promoters to compete with Jio and Airtel in an equal manner.
Vodafone Group Plc, the largest promoter of the telco and the Aditya Birla Group (ABG), another promoter, are expected to pitch in with additional funds for Vi.
Vodafone Idea had announced that it would be raising about Rs 14,500 crore. Out of this, Rs 4,500 crore will come from the promoters. The remaining amount Vi said that it would get from the external investors via debt, equity, or in any way possible. The management of the telco had said that they aim to complete the fund-raising activity by March-end.
The money raised will allow Vi to increase capex levels and also participate in the 5G spectrum auctions more freely.