New Delhi, Feb 28 (IANS) – Vodafone Idea shares plunged over 11% following its announcement of fundraising plans. Trading at Rs 13.98 on BSE, the capital raise is crucial for immediate liquidity and network expansion, as per Motilal Oswal Financial Services.
The company’s debt of Rs 2.1 trillion with an annual installment of Rs 430 billion from FY26 onwards poses challenges against FY24 EBITDA of Rs 84 billion. The low EBITDA leaves limited opportunities for equity holders, making debt servicing without external funding difficult, the report stated.
Vodafone Idea Ltd (VIL) board approved an equity fund raise of up to Rs 200 billion, with a total fund raise of Rs 450 billion comprising both equity and debt. Expected in the next quarter, the company faces significant risk post moratorium end in FY26 with an annual obligation of Rs 430 billion vs EBITDA of Rs 84 billion.
With the fund raise completion, the company plans to invest in 4G network expansion and 5G technology deployment. Shareholders meeting scheduled for April 2, the equity fund raise finalization expected in the coming quarter post shareholder approval, enhancing network infrastructure, the report highlighted.
The absence of investments has led to a risk for VIL, causing a shift of premium subscribers to other networks and impacting network capability, resulting in increased customer churn. The infusion of funds (equity + debt) is set to strengthen the company’s network infrastructure, as per the brokerage.
–IANS
biz/san/uk
