 "Vodafone, Vodafone Group")
Vodafone Idea share price: Shares of Vodafone Idea (VI) moved higher to Rs 17.40, up 3 per cent on the BSE in Wednesday's intraday trade amid heavy volumes. The stock of the telecom services provider bounced back 6.4 per cent from its intraday low of Rs 16.35.
The stock inched towards its 52-week high level of Rs 18.42 touched on January 1, 2024. It has recovered 45 per cent from a low of Rs 12.03 touched on June 4.
At 02:45 PM, Vi was trading 1.6 per cent higher at Rs 17.13 as compared to 0.51 per cent rise in the BSE Sensex. A combined 1,529 million shares of VI have, thus far, changed hands on the NSE and BSE.
Last week, India's third-largest telecom operator Vi disclosed plans to raise up to Rs 2,458 crore through a preferential share allocation to Nokia and Ericsson, aimed at clearing a portion of their pending dues. Nokia and Ericsson will participate for up to Rs 1,520 crore and Rs 938 crore worth of shares, respectively, subject to approval by VIL shareholders at the EGM to be held on July 10, 2024.
With this equity issuance, Vodafone Idea has raised Rs 24,000 crore of equity, including conversion of 1,440 optionally convertible debentures (OCDs) in March 2024 by ATC India (out of 1,600 OCDs issued); follow on public offer (FPO) issue in April 2024; and preferential issue to promoters in May 2024.
Additionally, in line with its stated fund-raising roadmap, the company is in active discussions with its lenders to raise debt funding to the tune of Rs 25,000 crore, Vi has said.
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This funding is part of Vodafone Idea's strategy to compete with larger telecom rivals Reliance Jio and Airtel in a market by enhancing its 4G coverage and 5G rollout.
"This comprehensive fund raise (equity and debt) will empower the company to work towards executing its well-defined strategy including expansion of its 4G coverage and launch of 5G services. This will enable VIL to participate in the large and significant opportunities offered by the Indian wireless sector," Vodafone Idea said.
The company, with a strong subscriber base of 212.6 million (March 31, 2024), 4G population coverage of over 1 billion Indians, competitive spectrum profile, extensive distribution reach and a well-established brand along with differentiated digital offerings, is well positioned to effectively compete in the market, it added.
The management said Vi is all set to participate in the industry growth with right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities.
As Vi embarks on its growth journey, support from key stakeholders is critical and the agreement with Nokia and Ericsson reaffirms these vendors as long-term partners of the Company, and sets the stage for the next phase of our growth, the management added.
Meanwhile, last month, global broking firm UBS upgraded Vodafone Idea stock to 'buy' with a target price of Rs 18. UBS believes the market is pricing in 15- 20 per cent mobile price increase in coming 12-24 months for Vi.
The foreign brokerage said a relief in the form of adjusted gross revenue (AGR) reduction by the Supreme Court or equity conversion, moratoriums by the government is highly likely, especially given the government's stated objective of ensuring three viable private telcos.
The foreign brokerage said a relief in the form of adjusted gross revenue (AGR) reduction by the Supreme Court or equity conversion, moratoriums by the government is highly likely, especially given the government's stated objective of ensuring three viable private telcos.
