Vodafone Idea: Board approves Rs. 25,000 crore rights issue

Vodafone Idea ltd group will infuse over Rs. 18,000 crore into India’s largest telecom operator Vodafone Idea Limited through a rights issue to strengthen the company so that it can face the intense competition put forth by Reliance Jio.

The board of directors of Vodafone Idea on Wednesday approved Rs. 25,000 crore fund-raising plan by way of the rights issue to existing eligible equity shareholders, the company said in a press release.

The promoter shareholders Vodafone Group and Aditya Birla Group have reiterated 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 the rights issue.

If the rights issue is undersubscribed each of the promoter shareholders reserve the right to subscribe to part or whole of the unsubscribed portion, subject to applicable law.

Vodafone holds 45.1 stakes in the combined entity, while Kumar Mangalam Birla-led Aditya Birla Group controls 26 per cent and Idea shareholders own 28.9 per cent.

The mega-merger was announced a few months after the entry of the deep-pocketed Reliance Jio, whose aggressive pricing and freebies impacted the financials of the entire industry, which has even seen bankruptcies and asset sell-offs. Jio has amassed of 280 million subscribers as on end of December 2018.

On Thursday, Vodafone idea stock opened at Rs. 34.05 per share and touched a high/low of 35.20/33.25 per share and closed at Rs.33.90 per share.