Promoters Bet Big: Kumar Mangalam Birla Acquire 1,86,00,000 Shares on September 6

Official documents reveal promoter and marquee investors purchased shares of the debt-ridden company after an 11 per cent slump in share price on September 6

Official documents filed with the exchange indicated that Aditya Birla Group's chief, Kumar Mangalam Birla, along with other prominent investors, purchased shares in Vodafone Idea Limited (VIL) on September 6, 2024. This was the day VIL’s stock declined by 11 per cent, as concerns arose regarding potential negative cash flows due to significant AGR and spectrum dues starting from fiscal 2026. According to the report, Kumar Mangalam Birla acquired 1,86,00,000 (1.86 crore) shares, while Pilani Investment purchased 30,00,000 (30 lakh) shares of VIL on the same day.

Vodafone Idea benefits from strong parentage, with promoters Aditya Birla Group and Vodafone Group. According to the Investor Presentation filed on September 9, both groups have invested significant capital into the business. In 2024, VIL raised Rs 24,000 crore, of which Rs 2,100 crore was contributed by the promoters. The promoter group has invested an additional Rs 7,000 crore over the past two years.

As per the presentation, as of July 19, 2024, Vodafone Group holds 22.6 per cent, Aditya Birla Group holds 14.6 per cent, the Government holds 23.1 per cent, and the public holds 39.7 per cent of the company.

Following the stock price slump, this move by the promoter to acquire a stake in the debt-ridden company signals strong promoter interest and potential for growth. It also helped protect retail investors' wealth.

Further, the company's management sounded positive in its recent investor presentation released on September 9. The management stated that after FY25, both price hikes and an increase in the company’s subscriber base are expected. VIL added that the price increase and subscriber additions will drive revenue growth from FY25 onwards.

Vodafone Idea Limited, formed through a partnership between Aditya Birla Group and Vodafone Group, is a major telecom service provider in India. The stock is currently trading at Rs 13.58, with a market capitalisation of over Rs 92,179 crore. So far in 2024, the stock has delivered a negative return of (-) 20 per cent on a year-to-date basis.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice.