Idea Cellular will raise up to Rs 3,500 crore by issuing equity shares to eligible investors through qualified institutional placement (QIP) route.
"The Board of Directors today accorded final approval for issuance of equity shares for an amount not exceeding Rs 3,500 crore by way of QIP to the eligible investors," Idea said in a regulatory filing.
On January 4, the Board had approved a proposal to raise up to Rs 6,750 crore. The company has already raised Rs 3,250 crore by allotment of shares to entities of promoter Aditya Birla Group (ABG).
The first tranche of fund raising had a bearing on the shareholding pattern of the company and also on its merger deal with Vodafone. The two parties have agreed that ABG will buy a minimum of 2.5 per cent of the merged entity from Vodafone for Rs 1,960 crore.
This equity sale transaction will reduce funding requirement on Vodafone Group from Rs 9,350 crore to Rs 7,390 crore to meet debt arrangement for the merged entity.
Infusion of Rs 3,250 crore, along with the proposed capital raise, will reduce Idea's net debt and as a result Vodafone's net-debt contribution to the merged entity will also be reduced.
The net debt of Idea as on December 31, 2017 stood at Rs 55,781.8 crore.
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