“I think we have good times ahead ... there will continue to be a few challenges but I still believe that we are at a point of inflexion,” Birla said on Thursday, responding to shareholders in his first address since his appointment as non-executive chairman in May.
“In my annual reflections, I had said tough times don’t last, tough companies do. Those words resonate more strongly with our company today,” he said, adding that the company had “navigated one of the most challenging periods in its history” through the resilience and commitment of its employees, the loyalty of its customers, the support of its business partners, the confidence of its shareholders and lenders, and a constructive policymaking environment.
“The focus now shifts firmly to execution,” he added.
At the EGM, shareholders approved promoter funding of ₹4,730 crore through promoter entity Suryaja Investments Pte Ltd. This is through equity-convertible warrants at ₹11 a share over 18 months with a fourth, or ₹1,182 crore, of the proceeds coming in first.
Birla assured shareholders that the carrier was working towards getting back in the reckoning.
“The work of rebuilding has begun, your company now looks ahead with confidence,” he said. “Across operations, customer services and network expansion, the company is pursuing its priorities with discipline and with purpose... The benefits of sustained investments in network infrastructure and rollout are now becoming increasingly visible, reflecting a stronger operational performance and improved customer service.”
Of the promoter equity infusion, Birla told shareholders that ₹3,000 crore would be used to reduce debt while ₹1,730 crore would be used for capital expenditure.
“This investment reaffirms the Aditya Birla group’s belief in the long-term prospects of your company and its continued alignment with the interests of all shareholders,” he added.
The funding will raise the group’s holding to 13 per cent from 9.6 per cent upon the conversion of the warrants, with the combined stake of the group and Vodafone Group plc rising to 28.5 per cent. Consequently, the government shareholding, which stands at 49 per cent, will reduce to 47 per cent, leaving room for the government to convert debt into equity in the future. Vodafone Idea has government debt of nearly ₹1.27 trillion related to spectrum payments.
Birla’s return to the helm and the infusion of equity are being considered a major positive for the beleaguered carrier, which has been trying to raise debt funding of ₹35,000 crore, critical for its revival and 5G expansion.
The carrier, which has nearly 193 million subscribers and has seen a few consecutive months of subscriber additions at the net level, has had a number of positive developments coming its way. While the government lowered its adjusted gross revenue dues by 27 per cent to ₹64,046 crore, which has to be paid in six equal annual instalments after a gap of 10 years, in the latest, the company got a favourable decision from the Bombay High Court, which quashed demand notices from the government seeking one-time spectrum charges from the carrier.
Vodafone told the BSE that while the issue was pending in the Supreme Court, it stood to benefit by ₹2,113 crore along with return of bank guarantees deposited with the government.
 "Aditya Birla group Chairman KM Birla said that the focus now shifts firmly to execution")