Vodafone Idea jumps over 10% ahead of board meeting to mull fundraise

Shares of Vodafone Idea jumped 10.4% to Rs 7.08 in Monday's intraday trade on BSE ahead of its board meeting to raise funds.

Debt-ridden Vodafone Idea's board will meet on Tuesday to discuss a proposal to issue Rs 1,600 crore debentures to mobile tower vendor ATC Telecom Infrastructure.

Vodafone Idea and ATC had agreed to extend the last date to issue optionally convertible debentures till February 28 after the shareholder's approval to issue the debentures lapsed in December.

"We wish to inform you that a meeting of the board of directors of the company is scheduled to be held on Tuesday, 31st January 2023, in relation to the said preferential issue of OCDs to ATC and to convene the extraordinary general meeting of the company to seek approval of the shareholders in this regard," Vodafone Idea said in a BSE filing.

At 12.36 pm, the scrip was trading 7.3% higher at Rs 6.88 over its last day's closing price of Rs 6.41 apiece. However, on a year-date basis, the stock has fallen about 14%.

Loss-making Vi’s board had approved the preferential issue of OCDs to ATC Telecom Infrastructure (ATC) at its extraordinary general meeting on November 21.

Vi had originally announced the issue of rupee-denominated OCDs to ATC to raise Rs 1,600 crore. It wanted to use the cash to repay dues to the US tower company estimated at under Rs 2,000 crore.

The equity conversion by the government is critical for Vi to induct investors and raise funds for expanding its 4G network, outlining its 5G rollout plans and clearing vendor dues.

Once the conversion happens, analysts reckon the government will hold about 33% of Vi’s equity and become the single-largest shareholder in the entity.

However, the government is believed to have pushed Vi to present a clear fund-raising plan, including more promoter infusion, before it goes ahead with the conversion.