Vodafone Idea shares zoom 14% as board to consider fundraising

The company's board of directors is scheduled to meet on September 4, 2020 to consider and evaluate any and all proposals for raising of funds in one or more tranches

Shares of Vodafone Idea (VIL) leaped 14 per cent to Rs 10.1 on the BSE on Wednesday after the telecom services provider announced that its board will meet on Friday to consider fund-raising plans.

“A meeting of the board of directors of the Company is scheduled to be held on September 4, 2020 to consider and evaluate any and all proposals for raising of funds in one or more tranches by way of a public issue, preferential allotment, private placement, including a qualified institutions placement or through any other permissible mode and/or combination thereof as may be considered appropriate, by way of issue of equity shares or by way of issue of any instruments or securities,” VIL said in a exchange filing. READ THE FILING HERE

On Tuesday, VIL's stock had ended 13 per cent lower at Rs 8.89 after the Supreme Court allowed staggered payments towards settlement of Adjusted Gross Revenues (AGR) dues. It allowed for a 10-year repayment period for the AGR liability (at 8 per cent MCLR), with 10 per cent of total dues to be paid upfront on March 31, 21 and the rest in annual payments from March’22.

“VIL, with pre-Ind-AS 116 EBITDA of Rs 6,800 crore in FY21 and net debt of Rs 1.5 trillion (including the AGR liability), is in a precarious situation. However, with payments from Vodafone PLC, Bharti Infratel, and existing operating cash flow (OCF), it could manage the current fiscal, but would require a sizeable price hike and capital infusion,” Motilal Oswal Securities said in a telecom sector update.

At 09:47 am, the stock was up 8 per cent at Rs 9.59 on the BSE, as compared to 0.33 per cent rise in the S&P BSE Sensex. A combined 296 million equity shares changing hands on the counter on the NSE and BSE so far.