Vi Board approves raising Rs 1,980 crore through preferential issue

The board of Vodafone Idea (Vi) has approved a plan to raise Rs 1,980 crore through a preferential issue to entities under the Vodafone Group PLC umbrella. This move will see Vi issuing shares to Omega Telecom Holdings and Usha Martin Telematics, valued at Rs 1,280 crore and Rs 700 crore respectively, as stated in their exchange filing on Monday.

A total of 1.75 billion equity shares, each with a face value of Rs 10, will be issued at a price of Rs 11.28 per share. An extraordinary general meeting (EGM) has been scheduled for January 7, 2025, to obtain shareholder approval for this issuance.

As of September 30, 2024, Omega Telecom Holdings held a 0.40 per cent stake in Vi, while Usha Martin Telematics had a 0.13 per cent stake. Post-issuance, these stakes will increase to 1.98 per cent and 1 per cent, respectively.

This development comes shortly after Vodafone PLC announced the liquidation of its remaining 3 per cent stake in Indus Towers, valued at Rs 2,840 crore. The proceeds from this sale have been utilized to settle outstanding dues of $101 million (approximately Rs 856 crore) and to address the residual dues of Vodafone Idea. Earlier in June, Vodafone had offloaded an 18 per cent stake in Indus Towers, raising Rs 15,300 crore through block deals.

Promoter-wise, Vodafone Group holds a 22.56 per cent stake in Vi, Aditya Birla Group holds 14.76 per cent, and the Indian government has a 23.15 per cent stake.

By the end of Q2FY25, Vi's total obligations to the government amounted to Rs 2.12 trillion, which includes deferred spectrum payment obligations of Rs 1.41 trillion and an adjusted gross revenue (AGR) liability of Rs 70,320 crore.

In its recent capital-raising efforts, Vi secured Rs 24,000 crore in equity, including Rs 2,458 crore through preferential shares to long-term vendors Nokia and Ericsson in July. The company also converted 1,440 optionally convertible debentures (OCDs) issued to ATC India in March 2024 and conducted a preferential issue to promoters in May. Additionally, Vi launched a significant Rs 18,000 crore follow-on public offer in April 2024. The company is currently negotiating with lenders to secure debt funding of approximately Rs 25,000 crore.