Vodafone Idea Finalises Rs 25,000 Cr Rights Issue

In order to improve its service offerings and to put up a brave fight against Reliance Jio and Bharti Airtel, Vodafone Idea has finalised a rights issue to raise Rs 25,000 crore.

“The Board has, considered and approved the offer and issue of fully paid-up and/or partly-paid up equity shares of the Company and/or other securities convertible into equity shares of the Company, including but not limited to, compulsorily convertible debentures, for an amount aggregating up to Rs. 25,000 crore, by way of a rights issue,” VodafoneIdea Idea said in a filing.

Each of the promoter company of the newly merged entity Voda Idea Limited – Vodafone Group and Aditya Birla Group – will  invest Rs 11,000 crore and Rs 7250 crore respectively, as part of the rights issue.

In November last year the company had announced to raise Rs 25,000 crore. It was just now that it was finalised to be done via rights issue.

The BSE filing also said that in the case of the rights issue under subscribed, the promoter shareholders retain the rights to pump in more money for the rights issue.

“The Promoter shareholders (Vodafone Group and Aditya Birla Group), have re-iterated to the Board that they intend to contribute up to Rs.11,000 crore and up to Rs.7,250 crore respectively as part of such Rights Issue. Further, the Promoter shareholders have indicated that in case the Rights Issue is undersubscribed, each of the Promoter shareholders reserves the right to subscribe to part or whole amount of the unsubscribed portion, subject to applicable law,” Vodafone Idea said in the filing.

Raising money, through any means, has become imperative for the newly formed firm as the company needs to invest it in order to bolster its services portfolio. The company needs to upgrade its network, including that of nation wide 4G, as well as augment its products and services portfolio – both for consumers as well as for enterprises.

Both of its competitors, Jio and Airtel, are investing considerably in bolstering their network as well as coverage – Jio with around Rs 12,000-Rs15,000 per quarter and Airtel with around Rs 6000 to Rs 8000 crore.

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