Vodafone Idea approves allotment of ₹2,075-crore shares to Aditya Birla Group arm

Stressed telecom operator Vodafone Idea on Tuesday informed the exchanges that its capital raising committee has approved the allotment of shares worth ₹2,075 crore to Oriana Investments, an arm of the Aditya Birla Group.

More than 139 crore shares will be allotted at a rate of ₹14.87 apiece, the company said in a regulatory filing.

The allotment had received the board of directors' nod last month, as part of the strategy to mop up capital. The amount, via this preferential allotment, is being raised from Aditya Birla Group, which is part of the telco's promoter group.

As of March 31, 2024, Aditya Birla Group owned 10.59% stake in Vodafone Idea, according to the shareholding pattern available with the exchanges.

In its exchange filing today, Vodafone Idea said, "The Capital Raising Committee of the Board has, at its meeting held today i.e. 21 May 2024, approved the allotment of 1,395,427,034 equity shares of face value of ₹10 each at an issue price of ₹14.87 per equity share, aggregating to ₹2,075 crore to Oriana Investments Pte. Ltd, on a preferential basis".

Pursuant to the allotment, the paid-up equity share capital of the company stands increased to ₹67,878 crore from ₹66,483 crore.

Vodafone Idea mopping funds

Reeling under a funds crunch, Vodafone Idea has recently been on a capital raising spree. The company's board, while approving the ₹2,075-crore preferential issue last month, had also given its nod to raise ₹18,000 crore through a follow-on public offer (FPO).

The offer was the largest of its kind in the Indian market, surpassing ₹15,000 crore raised by private lender Yes Bank via the FPO route in 2020.

The FPO, launched in April, was oversubscribed nearly seven times as it received bids worth ₹88,124 crore. However, the company only retained ₹12,600 crore as it had collected ₹5,400 crore from anchor investors.

The fundraising was aimed at allowing the ailing telco to improve its positioning in the Indian telecom market, where it is presently a distant third behind rivals Reliance Jio and Bharti Airtel.

The funds are expected to help Vodafone Idea to shore up the finances for 5G roll-out, strengthen its 4G services, and complete the payment of dues to vendors.

Meanwhile, the company's shares have largely remained in the green following the FPO listing on April 25. In the past one month, the stock has gained by 5.4%.

At 2:23 pm today, the shares were trading at ₹13.6 apiece on the National Stock Exchange of India (NSE), up 2.26% as against the previous closing price.