Vodafone Idea board on Friday approved until ₹Rs 25 billion fundraising plan through the sale of shares and debt, according to a statement issued by the telecommunications giant. The board of directors of the indebted telecommunications company approved increasing to ₹15,000 crore through the issuance of shares, global certificates of deposit, US certificates of deposit, foreign currency convertible bonds, convertible bonds, warrants, composite issuance of non-convertible bonds and warrants, “the company said in a statement.
The Vodafone Idea board also decided to “issue unsecured and / or guaranteed non-convertible bonds up to a total amount of ₹15,000 crore, through public offering or private placement or otherwise, in one or more tranches. “” Total fundraising will not exceed ₹25 billion rupees, “the company said at the BSE filing.
Vodafone Idea recorded a loss of ₹25,460 crore in the first quarter. The drop in ARPU in the June quarter to ₹114 was due to a lower rate plan reload by customers in the wake of the COVID-19 outbreak.
The company must ₹58,254 crore to the Department of Telecommunications in license fees, spectrum usage charges, interest and penalties. Of this has already paid ₹7,854 crore. The Supreme Court previously asked telecommunications companies to pay 10% of AGR’s fees in advance and set a 10-year payment term for the rest of the amount.
Analysts at Motilal Oswal said in a note: “Vodafone should be able to manage the cash flow requirement in fiscal year 21 without a price increase, considering it has a ₹Cash requirement of Rs 14.100 crore in 9MFY21 including capex of ₹6400 crore and an initial amount of ₹5,800 crore for AGR, along with the cash interest cost of ₹1900 crore, against ₹5100 crore of operating cash flow (OCF), ₹7100 crore from Vodafone PLC, and ₹4000 from the sale of Bharti Infratel’s stake. Therefore, to offset the cash requirement, it would have to take a 22% price increase to manage the financing requirement. The company may require a big round of price hikes, along with a capital increase, to fill the gap. “
Vodafone Idea shares extended their gains to the third straight session on Friday. Scrip jumped 51.29% to its new 52-week high of ₹1:45 pm on September 4 ₹8.89 on September 1.
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