9% Growth in Fund Raising Plans for Vodafone Idea: What Investors Should Know

In early trading on February 23, shares of Vodafone Idea Limited shot up 9% to Rs 17.60, extending gains for the second day after a 6% spike the day before.

The business has not said how much money it intends to raise, although it may do so in one or more tranches using equity mechanisms such as rights issues, preferential share issues, and qualified institutional placements.

The firm reported a net loss of Rs 6,985.9 crore for the third quarter of the fiscal year 2023–24, which is a decline of 12.56 percent from Rs 7,990 crore for the same time the previous year.

But compared to Rs 10,621 crore in the third quarter of the previous fiscal year, the revenue for the same period was Rs 10,673.1 crore, a tiny rise of 0.49 percent.

The financially constrained company has been having a lot of trouble raising funds, which is critical considering the amount of debt it has on file. In addition, significant financial expenditures are required for network enhancement and the introduction of 5G services in order to combat Bharti Airtel and Reliance Jio.

With deferred spectrum payment obligations of Rs 1.38 lakh crore, AGR liability of Rs 69,020 crore owed to the government, dues of Rs 6,050 crore to banks and financial institutions, and optionally convertible debentures totaling Rs 1,660 crore, Vodafone Idea’s gross debt as of December 31 was Rs 2.15 lakh crore.

Aditya Birla Group Chairman Kumar Mangalam Birla said on Thursday that the company is still committed and is working hard to attract outside investment. The remarks had caused the stock to rise.

“We are moving very well, but we are unable to provide a deadline.We are still fully committed to Vodafone Idea, and as we have said publicly, we are actively seeking outside investment,” Birla stated.

Analysts at Nuvama have recommended a “reduce” on the stock due to worries about the company’s Q3FY24 results. The significance of attentively observing the capital-raising initiatives and the Average Revenue Per User (ARPU) trajectory is emphasized in the paper. Furthermore, Nuvama highlights how important it is for the business to avoid falling much behind its competitors in the adoption of 5G technology.