Mon. Jun 24th, 2024
Vodafone Idea FPOFILE PHOTO: REUTERS/Danish Siddiqui

Vodafone Idea Ltd (VIL) shareholders approved a proposal to raise Rs 20,000 crore by issuance of securities in a meeting called by the Board.

In an extraordinary general meeting (EGM) convened on Tuesday, the shareholders gave a go-ahead for raising capital.

Vodafone-Idea Ltd, in a BSE filing, stated the voting outcome of EGM, where 99.01 percent of total votes sided with the resolution concerning the “issuance of securities up to an aggregate amount of Rs 20,000 crore”.

The approval aligns with the plan of action of the company to raise Rs 45,000 crore through a combination of equity and debt. The injection of funds will provide competitive services like those of its rivals Reliance Jio and Bharti Airtel, besides working on retention of its subscriber base.

This fundraiser will be a touchstone for VIL to bolster its position in the market and remain relevant as a service provider. The market dominance is currently by two players- Jio and Bharti Airtel, where VIL lags by a wide margin.

In February this year, the telecom company’s board agreed to pull in funds by raising Rs 20,000 crore in equity from promoters and other investors by June, with an aim to fortify finances for the tarried 5G rollout and improving 4G services.

Bail Out:

Beleaguered Vodafone Idea, which endured the blow struck by the debutant Jio, has been gasping for breath for survival. In 2022, in an attempt to Bail out cash-strapped VIL, the government declared a rescue package to which later SEBI, the Indian market regulator, agreed. The government proposed to convert dues of over $1.92 billion by telecom operator Vodafone Idea to equity.

The government has more than a 30 percent stake by virtue of conversion, capturing larger shares in the company like those of the Vodafone Group and Aditya Birla Group.

Also Read: Vodafone Idea Can’t Bring More “Ideas” To Help Company Not Collapse!

Falling Subscribers:

TRAI’s latest data shows desperation for Vodafone Idea to raise funds as it continues to lose subscribers to its competition.
15.2 lakh wireless subscribers left VIL, mobile subscriber base dropped to 22.15 crore in January – its operational metrics arrested a sharp contrast to subscriber gains by Jio and Airtel.

By Harshita Sharma

I bring to you updates from business, policy and economy spectrum.

4 thought on “Vodafone Idea To Raise Rs 20,000 Cr To Save The Sinking Ship, Receives Shareholders’ Nod”
  1. I’m surprised that the shareholders are still willing to invest in a sinking ship. It’s high time that Vodafone Idea takes drastic measures to turn their business around and show some tangible results, rather than just relying on handouts.

  2. Wow, I’m shocked that Vodafone Idea is managing to stay afloat despite their financial struggles. I hope this infusion of capital helps them turn things around and provide better services to customers.

  3. I’m not surprised to see VI raising funds to bail out the company. The amount is staggering! I hope this money is utilized wisely and not just used to pay off debts. The competition in the market is fierce, and it’s going to take a lot more than just throwing money at the problem to turn things around.

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