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Vi’s Board approve preferential allotment of equity shares of upto Rs 2458cr

The Board of Directors of Vodafone Idea have today approved preferential allotment of ~166 crore equity shares of face value of Rs. 10/- each, at an issue price of Rs. 14.80 per share, for an aggregate consideration of up to Rs. 2,458 crore, to two of its key vendors, Nokia Solutions and Networks India Private Limited and Ericsson India Private Limited. This preferential allotment price is higher by ~35% to the FPO price and comes with a lock in of 6 months.

Nokia and Ericsson will participate for up to Rs. 1,520 crore and Rs. 938 crore, respectively, subject to approval by Vi shareholders at the EGM to be held on July 10, 2024. Nokia and Ericsson have a long-term partnership with Vi, as key suppliers of network equipment, and this preferential allotment will enable Vi to clear part of their outstanding dues. It further bolsters Vi’s capex rollout for building a top quality 4G & 5G network to contribute towards India’s digital transformation.

Post this preferential issuance, the shareholding of Nokia and Ericsson in the company will be 1.5% and 0.9%, respectively. The Promoter (ABG and Vodafone) shareholding will stand at 37.3% and the shareholding of the Government of India will stand at 23.2%, while the balance of 37.1% will be public shareholding.

With this equity issuance, Vi has raised ~Rs. 24,000 crore of equity, including conversion of 1,440 OCDs in Mar 2024 by ATC India (out of 1,600 OCDs issued), FPO issue in Apr 2024, and preferential issue to promoters in May 2024. Additionally, in line with its stated fund-raising roadmap, the telco is in active discussions with its lenders to raise debt funding to the tune of Rs. 25,000 crore.

This comprehensive fundraise (equity and debt) will empower Vi to work towards executing its well-defined strategy, including the expansion of its 4G coverage and launch of 5G services. This will enable Vi to participate in the large and significant opportunities offered by the Indian wireless sector. The company, with a strong subscriber base of 212.6 million (March 31, 2024), 4G population coverage of over 1 billion Indians, competitive spectrum profile, extensive distribution reach, and a well-established brand along with differentiated digital offerings, is well-positioned to effectively compete in the market.

Akshaya Moondra, CEO, Vodafone Idea Limited, said, “Vi is all set to participate in the industry growth with the right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities. As Vi embarks on its growth journey, support from key stakeholders is critical, and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the company, and sets the stage for the next phase of our growth.”

CT Bureau

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