Vodafone Idea shares jump 13% on fundraising plan

Shares of Vodafone Idea rallied nearly 13% in intraday trade on Friday, in an otherwise muted broader market, amid fundraising plan. The telecom major in an exchange filing said that its board will meet on February 27, 2024, to consider and evaluate proposals for raising of funds in one or more tranches via equity or debt instruments.

“A meeting of the board of directors of Vodafone Idea will be held on February 27, 2024, to consider and evaluate any and all proposals for raising of funds in one or more tranches by way of a rights issue, further public offer, private placement … by way of issue of equity shares or by way of issue of any instruments or securities,” the Mumbai-headquartered telco says in a BSE filing on Thursday.

Reacting to the news, Vodafone Idea shares surged 12.9% to hit an intraday high of ₹18.38, driven by strong volume. Early today, the telecom stock opened higher for the second straight session at ₹16.67, up 2.4% against the previous closing price of ₹16.28 on the BSE.

At the time of reporting, Vi shares were up 8.5% at ₹17.66, with 19.95 crore shares changing hands over the counter as compared to two-week average volume of 6.7 crore scrips. The market capitalisation rose to ₹86,017 crore.

Vi shares touched its 52-week high of ₹18.42 on January 1, 2024, and a 52-week low of ₹5.70 on March 31, 2023. The counter surged 164% in the past one year; 123% in six months; and 23% in a week.

Vodafone Idea shares have seen some momentum in the last one year, owing to improvement in its financial performance and consistent effort by the management to raise funds.

Akshaya Moondra, CEO of Vodafone Idea, in a post Q3 earnings call said, “We remain engaged with various parties for fundraising to make required investments for network expansion, including 5G rollout.”

“Our network investments have been impacted on account of liquidity constraints but we continue to upgrade the existing non 4G sites to 4G by spectrum refarming. Over the last one year, we have added almost 700 unique 4G towers and over 5,200 4G broadband sites. As a result, our broadband coverage as well as capacity has expanded. So far we have shut down 3G services in 5 circles of Gujarat, Andhra Pradesh, Maharashtra, Mumbai and Kolkata by refarming the spectrum in these circles to 4G.”

In Q3 FY24, telecom major Vodafone Idea saw its net loss narrowing to ₹6,985 crore, as against ₹7,990 crore net loss in the same period last year. The average revenue per user (ARPU) of the company, however, rose 7.5% year-on-year to ₹145 from ₹135 in Q3 FY23. On the operating front, EBITDA grew 6.8% YoY from ₹2,000 crore in Q3 FY23 to ₹2,140 crore, the highest in the last 11 quarters. 4G subscriber base rose to 12.55 crore as compared to 12.10 crore in Q3 FY23.

“We are able to grow our 4G subscribers and ARPUs consecutively for the last ten quarters. We have also reported in this quarter the highest pre-IndAS EBITDA of ₹2.14 crore in the last eleven quarters. Further, we remain focused on providing competent data and voice experience at locations we are present where we are present, and are building a differentiated digital experiencing, adding several digital offerings in the recent quarters,” Moondra informed investors in the conference call post Q3.

As of December 31, 2023, the total gross debt (excluding lease liabilities and including interest accrued but not due) stood at nearly ₹2.15 lakh crore, which comprised deferred spectrum payment obligations of ₹1.38 lakh crore and AGR (adjusted gross revenues) liability of ₹69,020 crore.

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