Vodafone Idea through a preferential issue from parent Vodafone Plc for Rs. 1,980 crore will be collected

Vodafone Idea (Vi) has issued new equity from its promoter Vodafone Group Plc on preferential basis for Rs. Raising Rs 1,980 crore, the UK parent sold its remaining stake in Indian telecom tower unit Indus Towers last week.

The funds will be used by Vi to clear a portion of the outstanding dues of Indus Towers.

Vodafone Idea’s board of directors has approved two Vodafone group entities for Rs. 11.28 per share allowed the issuance of 1.76 billion equity shares – Omega Telecom Holdings Pvt Ltd at Rs. 1280 crore and Bharatiya Usha Martin Telematics Ltd Rs. 700 crores. said in an exchange filing on Monday.

Vi stock on BSE on Monday fell 0.25% to Rs. Closed at 8.10. Shares of Indus fell 0.75% to Rs. closed at 361.95.

With the deal, the Vodafone group’s holding in V will increase by 2.45 percentage points, while that of the joint venture partner, India’s Aditya Birla Group (ABG) and its other shareholders, including the government, will decrease proportionately.

Currently, Vodafone and ABG hold 22.56% and 14.76% stake in Vi respectively. The government is Vi’s largest shareholder, holding a 23.15% stake.

ET reported last week that Vodafone Group plans to infuse fresh capital into Vodafone Idea (Vi) from a portion of its Indus Towers stake sale that will help the UK carrier’s Indian telecom joint venture pay off its dues to the telecom tower company faster. .

Last week, Vodafone sold its remaining 3% stake in Indus Towers in a block deal worth over $300 million (Rs 2,540 crore), completely exiting the Indian tower company that is now a subsidiary of Bharti Airtel.

Vodafone Group had earlier said the proceeds from the sale of the Indus stake would initially be used to pay off the UK carrier’s outstanding debt of $101 million, which is secured against Vodafone’s Indian assets.

Additionally, Vodafone said it plans to invest the remaining amount (around $200 million) in fresh shares in Vodafone Idea (Vi) to help its Indian telecom joint venture with Aditya Birla Group clear a portion of Indus Towers’ old dues.
According to brokerage analysts, in the last two quarters, VA has charged its Indus dues at Rs. 800-1,000 crores were paid. Consequently, Indus reduced the allowance for doubtful receivables related to Vi for the quarter ended September 30, 2024 to Rs. 3548.4 crore, which in the quarter ended March 31, 2024 was Rs. 5385.3 crores. But Vi’s total dues on Indus are still estimated. Around Rs. 7,000 crore, industry officials aware of the matter said.

From January 2023, Vi pays Indus 100% of its monthly billings, and also its past dues from time to time.

In June 2024, UK’s Vodafone sold 18% to Indus – up from its previous 21.05% holding – through an open market transaction for Rs. 15,300 crores. Proceeds from the stake sale were used to clear a €1.8 billion loan secured against mostly Indian assets.