Vodafone Idea has announced plans to raise Rs 2,000 crore through the issuance of equity shares or convertible securities on a preferential basis to entities within the Vodafone Group. The company's board is scheduled to meet on December 9, 2024, to discuss this proposal.
The funds will help Vodafone Idea address its financial challenges and support its operations.
Vodafone Idea had previously announced a larger fundraising plan of Rs 25,000 crore, but it has been delayed due to issues related to Adjusted Gross Revenue (AGR) dues.
Vodafone Idea owes Rs 2,03,430 crore to the government as of March 31, 2024. In this, Rs 1,33,110 crore is Deferred Spectrum Payment Obligations and Rs 70,320 crore in AGR Liability.
Following the fundraising announcement, Vodafone Idea's shares saw a slight increase, closing 2.6% higher at Rs 8.42.
The company is also seeking to raise Rs 10,000 crore through debt funding.
Among 22 analysts tracking the company, four maintain a 'buy' rating, five recommend a 'hold,' and 13 suggest 'sell,' according to Bloomberg data.
The Department of Telecommunications (DoT) is considering a proposal to waive bank guarantees for past spectrum auctions, which would primarily benefit Vodafone Idea.
The Supreme Court widened the definition of AGR to include all revenues except termination fee and roaming charges. Recently, the Supreme Court rejected Vodafone Idea's curative petitions to re-compute the AGR dues. The company's financial strain has been exacerbated by the AGR dues, leading to delays in fundraising and network expansion plans.
The government has provided some relief through a four-year moratorium on spectrum and AGR dues, but the financial challenges persist.
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