Vodafone Idea shares rally 6% as board approves fundraise of ₹4,500 crore

Shares of Vodafone Idea rose over 6 percent in intraday deals on Friday after the company's board of directors approved the allotment of 338 crore equity shares to 3 promoter group entities for around ₹4,500 crore.

The board has approved the allotment at ₹13.30 per share to Euro Pacific Securities, Prime Metals and Oriana Investments according to the BSE filing.

The stock rose as much as 6.4 percent to its intra-day high of ₹10.3 per share on the BSE. In 2022 YTD, the stock has lost over 20 percent, however, in the last 1 year, it is up a little over 4 percent.

"...the capital raising committee of the Board of Directors has, at its meeting held today...considered and approved the allotment of 3,38,34,58,645 equity shares of ₹10 each for cash at an issue price of ₹13.30 per equity share (including a premium of ₹3.30 per equity share), aggregating to ₹4,500 crore to the following allottees," Vodafone Idea said in a BSE filing.

This includes allotment of 196 crore equity shares to Euro Pacific Securities (promoter), 57 crore equity shares to Prime Metals (promoter), and 84 crore equity shares to Oriana Investments (promoter group).

The shareholders of the company had approved the said issuance through a special resolution passed at the extraordinary general meeting held on March 26, 2022.

Debt-ridden telecom operator Vodafone Idea (VIL) has on March 3 informed that its board has approved raising up to ₹14,500 crore, including ₹4,500 crore from promoter entities - Vodafone and Aditya Birla Group.

An amount of ₹10,000 crore would be raised by way of equity or debt instruments, in one or more tranches, it had further added.

The fundraising comes at a time when Indian telecom operators are gearing up for the rollout of 5G services. Birlas own over 27 percent stake in VIL, while Vodafone Plc holds more than 44 percent.

Recently, Bharti Airtel bought Vodafone's 4.7 percent stake in Indus Tower for ₹2,388 crore. This deal was on the condition that funds be used by Vodafone as fresh equity in Vodafone Idea and simultaneously remitted to Indus to clear outstanding dues.

In February, the Vodafone Group (Vodafone) raised around ₹1,442 crore by selling a 2.4 percent stake in Indus Towers via a block deal to an unnamed investor.