28-Feb-2024
2 mins read
Vodafone Idea shares showed a three consecutive days fall. The falls extended on Wednesday, February 28, 2024 trading session. The company’s board approves the fundraising proposal of Rs 45,000 crore through equity and debt. Recently, a board meeting was held, which made some important decisions for the future of Vodafone Idea.
The company will raise Rs 20,000 crore through a combination of equity or equity-linked instruments and the remaining via a debt. The company’s promoters will also participate in the proposed equity raise.
In future, the company is likely to call a shareholders meeting on April 12, 2024, and post shareholders’ approval; the fundraising process is expected to get completed in the coming quarters. Also, the company will remain actively engaged with its lenders to execute the debt funding.
Investment Toward Enable Expansion
The combination of debt and equity fundraising will help the company invest toward the significant expansion of 4G and 5G networks. The investment will enable Vodafone Idea to improve its competitive positioning and offer a better customer experience.
Vodafone Idea Debt Update
Vodafone Idea had an overall debt of Rs 2.5 lakh crore including bank debt of Rs 4,500 crore and spectrum AGR dues of Rs 2.1 lakh crore. The equity raise may give a temporary relief to the company but is likely to have a limited financial impact. To revive the telecom business, the company needs to work on new customer acquisition and decrease the debt.
Vodafone Idea shares fell sharply and corrected by approximately 24% in the last three consecutive sessions. The stock price slipped below Rs 14 and eroded the gains generated in the last week. Presently, Vodafone Idea is trading at Rs 143.85 with a decline of -12.62%.