The share price of Vodafone Idea jumps 2% to intra-day high of Rs 16.38 after the company announced plans to raise up to Rs 2,458 crore through a preferential share issue to its European equipment vendors Nokia and Ericsson. This move aims to clear a portion of their pending dues and support the telco’s expansion of 4G services and rollout of 5G technology.
In a statement on Thursday, VIL’s board of directors approved a preferential allotment of 1.66 billion equity shares at Rs 14.80 per share. Nokia of Finland will invest up to Rs 1,520 crore, while Ericsson of Sweden will invest up to Rs 938 crore.
The issue price represents a 35% premium over the April follow-on offer (FPO) price of Rs 11 per share and includes a six-month lock-in period. Following the share issue.
How Much Will Nokia and Ericsson Hold Post Deal?
Nokia and Ericsson will hold stakes of 1.5% and 0.9% respectively in VIL. The Aditya Birla Group and UK’s Vodafone Group Plc, as promoters, will maintain holdings of 22.8% and 14.5% respectively, while the government will retain a 23.2% stake. The public will hold the remaining 37.1%.
With this latest equity raise, Vodafone Idea has garnered approximately Rs 24,000 crore in recent months. The company is also actively seeking debt funding of Rs 25,000 crore from lenders.
According to Vodafone Idea, the preferential allotment to Nokia and Ericsson underscores their longstanding partnership as key suppliers of network equipment. It aims to settle a portion of their outstanding dues and strengthen its capital expenditure for developing high-quality 4G and 5G networks, contributing to India’s digital transformation.
Over the past five years, VIL has raised Rs 30,000 crore, with more than 75% of these funds coming from its two promoter groups. The latest funding round has also seen an investment of over Rs 2,000 crore from the Aditya Birla Group.
Stock Performance in past 5 years
In terms of stock performance, Vodafone Idea shares have demonstrated positive returns across multiple time frames. Over the past month, the stock has given a commendable 21.81% return, showcasing its stability and growth potential. The last six months have seen even more impressive results, with a substantial increase of 15.70%, indicating a strong upward trend.
In past one year, Vodafone Idea shares have surged by 104.30%, reinforcing the stock’s positive momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an impressive return of over 29.12% in the last five years, emphasizing its sustained growth and attractiveness to investors.
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