MUMBAI : Vodafone Idea shares rose as much as 13.61% on Wednesday after the telecom operator said its board of directors will meet on Friday to consider fundraising proposals.
At 02:44 pm, Vodafone Idea was trading at ₹9.75 to 9.67% from its previous close, while the benchmark Sensex index advanced 0.38% to 39,048.17.
The announcement was made yesterday after market hours.
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Vodafone Idea in a regulatory filing said that “it will consider and evaluate each and every one of the proposals for fundraising in one or more tranches through a public issuance, preferential assignment, private placement, including a placement in qualified institutions or through any other mode and / or combination thereof, including convertible bonds in foreign currency, convertible bonds, warrants and / or non-convertible bonds including non-convertible bonds together with warrants, which may or may not be listed. “
Yesterday, the Supreme Court granted telecom operators 10 years to settle adjusted gross income (AGR) quotas. Vodafone Idea, together with other telecommunications companies, will now have to make an advance payment of 10% of the total fees before March 31 according to the SC order. Thereafter, they must pay the balance in equal annual installments for 10 years at an interest rate of 8%, as directed by the superior court.
Motilal Oswal analysts in a note said that “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 reported a net loss of ₹Rs 25,460 crore for the quarter ended June 30 against a loss of ₹4,874 crore in the same period last year. Net sales fell 5.4% to ₹10,659 crore during the first quarter of fiscal year 21 compared to ₹11,270 million rupees a year earlier.
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