Mumbai: Struggling telecom operator Vodafone Idea has approved a plan to raise Rs 4,730 crore from a Singapore-based promoter group company of the Aditya Birla Group.
According to a company filing, Vodafone Idea’s board approved the issuance of up to 430 crore warrants to Suryaja Investments Pte. Ltd., Singapore.
Each warrant will later be converted into one equity share of the company. The issue price has been fixed at Rs 11 per warrant.
How the Investment Will Work
Under the deal structure, 25 per cent of the warrant amount will be paid at the time of subscription.
The remaining 75 per cent will be paid later when the investor exercises the option to convert the warrants into equity shares.
The fundraising is expected to provide financial support to Vodafone Idea as it continues efforts to strengthen operations and improve network services.
Kumar Mangalam Birla Returns as Chairman
The fresh investment comes shortly after Kumar Mangalam Birla once again took charge as the non-executive chairman of Vodafone Idea earlier this month.
His return came after the government reduced Vodafone Idea’s adjusted gross revenue (AGR) dues by around 27 per cent.
Following reassessment, the company’s AGR liabilities were reduced from Rs 87,695 crore to Rs 64,046 crore.
AGR Payments Spread Over Years
Vodafone Idea will now repay the revised AGR dues in phases spread over 10 years.
The company will pay a minimum of Rs 100 crore annually between FY32 and FY35. After that, the remaining dues will be paid in six equal yearly instalments from FY36 to FY41.
Apart from this, Vodafone Idea also needs to pay Rs 124 crore every year between March 2026 and March 2031 for AGR dues related to FY18 and FY19, which were not included in the reassessment.
Spectrum Dues Remain a Concern
While the AGR relief has reduced pressure on the company, analysts believe Vodafone Idea still faces a major challenge due to large spectrum payment obligations.
Reports suggest the company may need to repay nearly Rs 49,000 crore over the next three years, with payments rising sharply each year.
