Vodafone Idea shareholders have given a nod to a proposal to issue securities worth about ₹20,000 crore, the telecom services provider said in an exchange filing. This move comes a day after the company's virtual extraordinary general meeting (EGM).
India's third-largest telecom company would use the much-needed funding to reduce its liabilities, launch 5G services commercially and better compete with the larger rivals by stemming market-share loss.
“The resolution mentioned in the EGM notice stands passed with requisite majority," the Aditya Birla Group-promoted company said. Its shares closed 0.82% higher at ₹13.55 apiece on BSE.
The board of Vodafone Idea on February 27 permitted a ₹45,000-crore fundraising initiative which includes a ₹20,000-crore equity-based capital infusion from existing investors. It is expected that the company will be able to complete the equity fundraise by the end of June.
Existing promoters will be involved in the equity fundraise, the company had said earlier. It remains unclear whether promoters will include Britain's Vodafone Group Plc as well.
Following the equity fundraise, Vodafone Idea will look to raise debt, taking the total amount of funding to up to ₹45,000 crore. The fundraise is crucial for its ability to begin 5G services. The telecom operator remains the only one without consumer-end 5G services, after both Reliance Jio and Bharti Airtel rolled out 5G services across the country through last year.
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