Cash strapped operator, Vodafone Idea’s UK promoter, Vodafone Plc might be infusing another ₹500 crore of equity into the telecom operator soon.
In a regulatory filing on Bombay Stock Exchange, Vodafone Idea intimated that they will be conducting a board meeting on Wednesday, June 22, “to consider a proposal for raising of funds aggregating up to ₹500 crore, by way of issuance of equity shares and/or convertible warrants on a preferential basis to one or more entities belonging to Vodafone Group”.
Promoters Vodafone Plc and the Aditya Birla Group have already infused ₹4,500 crore of equity into the company earlier this year in March. The equity investments were made through Euro Pacific Securities Ltd and Prime Metals Ltd (Vodafone Group entities), and Oriana Investments Pte Ltd (Aditya Birla Group entity) on a preferential basis.
Small dent
Vodafone Plc’s additional investment of ₹500 crore will make an extremely small dent in the operator’s target to raise another ₹10,000 crore of funds through by the way of issuance of equity shared to external investors.
This comes after Vodafone Idea CEO, Ravinder Takkar, hinted last month that the company will be raising an additional ₹20,000 crore as a mixture of debt and equity very soon. These are funds that are needed by the company imminently, especially as the date for the 5G auctions has been decided, and they will be conducted next month.
According to analysts, fund raising from Vodafone Idea is absolutely necessary in order for the telco to participate in the 5G auctions. However, so far, it is unclear, whether the company will be able to close the deals of getting another ₹20,000 crore of funds.