Vodafone Idea To Raise Rs 2,458 Crore Through Preferential Issue

Vodafone Idea Ltd.'s board has approved raising Rs 2,458 crore through the issuance of shares on a preferential basis. The company will use the funds to clear part of its outstanding debt, expand its 4G coverage and launch 5G services.

The fundraising is subject to approval by shareholders at the extraordinary general meeting to be held on July 10.

The company will issue 166 crore shares with a face value of Rs 10 each in the preferential issue, an exchange filing said. The issue price has been set at Rs 14.8 per share, including a premium of Rs 4.80 per share. The issue price is 35% higher than the FPO price and has a lock-in period of six months.

The telecom major will issue 102.7 crore shares at an issue price of Rs 14.80 per share, totaling Rs 1,520 crore, to Nokia Solutions and Networks India Pvt. In addition, it will issue 63.4 crore shares at the same issue price to Ericsson India Pvt., aggregating Rs 938 crore. Post this preferential issuance, the shareholding of Nokia and Ericsson in the company will be 1.5% and 0.9%, respectively.

The cash-strapped telecom company has raised Rs 24,000 crore of equity, which includes the conversion of 1,440 OCDs in March. The company is in active discussions with lenders to raise debt funding of Rs 25,000 crore, it said.

In April, Vodafone Idea approved the issuing of shares worth Rs 2,075 crore to promoters. The company's board had approved the issuance of 139.5 crore shares at an issue price of Rs 14.87 per share.

Shares of Vodafone Idea closed 2.31% lower at Rs 16.07 per share, as compared with a 0.33% advance in the NSE Nifty 50.

Correction: Corrected price for shares to be issued to Ericsson India in the fourth paragraph.