The share price of Vodafone Idea, the third-largest telecom operator in India, rose by 0.72 percent on Wednesday, closing at Rs 14.04 on the NSE. The stock gained momentum after the company announced its plans to raise up to Rs 25,000 crore through a mix of equity and debt instruments.
The company said that its board of directors has approved the proposal to raise funds in one or more tranches by way of a public issue, a preferential allotment, a private placement, a qualified institutional placement, or a combination thereof. The company said that the funds will be used to pay the adjusted gross revenue (AGR) dues, invest in network expansion, and improve its competitive position in the market.
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Vodafone Idea has been struggling to survive in the highly competitive telecom sector, which has been dominated by Reliance Jio and Bharti Airtel. The company has been losing subscribers and market share, and has been facing a huge debt burden and regulatory dues. The company has to pay Rs 58,254 crore to the government as AGR dues, of which it has paid Rs 7,854 crore so far.
The company has been exploring various options to raise funds, including selling its stake in Indus Towers, monetizing its fiber and data center assets, and seeking relief from the government. The company has also been in talks with potential investors, such as Oaktree Capital, Varde Partners, and Apollo Global Management, to infuse capital into the company.
The company’s fundraising plan has been welcomed by the analysts and investors, who believe that it will help the company to improve its liquidity position, reduce its debt, and strengthen its balance sheet. The company’s stock price has risen by over 75 percent in the past six months, reflecting the optimism in the market. However, the company still faces many challenges, such as retaining its customers, increasing its average revenue per user (ARPU), and enhancing its network quality and coverage. The company will have to execute its fundraising plan successfully and efficiently, and use the funds wisely to revive its business and regain its market share..
