Vodafone Idea will raise Rs 2075 crore from Aditya Birla Group, will there be movement in shares?
It's interesting to note that Vodafone Idea has provided investors with a solid return of 22% over the last 6 months, with a significant increase of 117% over the past year. Now that the company's board has approved raising Rs 2075 crore from the promoter Aditya Birla Group, it will be intriguing to see how Vodafone Idea plans to utilize this capital. The impact that this capital raise may have on the company's shares is also something to keep an eye on.
It's interesting to note that the financially distressed telecom company Vodafone Idea is now trying to raise funds to bring stability to its operations. The company has received approval from its board to raise Rs 2075 crore from promoter Aditya Birla Group, and has also been granted permission to increase the authorized share capital to Rs 1 lakh crore. Vodafone Idea is also planning to raise Rs 45,000 crore through equity and debt, and is seeking shareholders' approval on the existing proposals at an EGM on May 8. It's a significant move considering the bank loan on the company is currently around Rs 4,500 crore.
What will Vodafone Idea do with the capital?
It's worth noting that Vodafone Idea, one of the major players in the telecom market, lags behind its rivals such as Reliance Jio and Bharti Airtel. To stay competitive, the company plans to use the funds raised from equity and debt to improve its services, increase 4G coverage, roll out 5G network, and boost its capacity. As for the company's share price, it closed at Rs 13.35 in the last trading session on Friday, April 5. Over the past 6 months, the stock's return has been positive, giving around 22 percent to the investors. There has been a significant increase of 117 percent over the last year. However, the share price of Vodafone Idea has declined by 21 percent this year i.e., 2024. It is expected that there could be some movement in the share price on Monday due to the company's fund-raising initiative.(This is not investment advice. Before buying or selling any shares, please consult your financial advisor.)
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