Vodafone Idea board to meet on Friday to consider fundraising

Mint had earlier reported, citing two company executives, that debt-ridden Vodafone Idea may resume talks of fundraising that slowed down due to the AGR case.

According to telecom experts, the company needs fresh equity, higher tariff and concession in various government levies to continue operations besides paying the annual instalment of the AGR dues that include spectrum usage charges, licence fee, interest, penalty and interest on penalty. Voda Idea owes the government ₹58,254 crore.

The telecom operator plans to raise capital “in one or more tranches by way of a public issue, preferential allotment, private placement, including a qualified institutions placement," the company said in the filing.

In a post-earnings conference call for analysts, the management had said Vodafone Idea’s fundraising plans hinged upon the apex court’s verdict and the board will decide on the quantum after the order is pronounced.

Shares of Vodafone Idea plunged after the Supreme Court’s decision on Tuesday, ending nearly 13% lower on the BSE and indicating that investors remained wary of the telco’s future. The benchmark Sensex closed up 0.7%.

Rival Bharti Airtel Ltd’s shares jumped to close over 6% higher as the apex court's verdict favours the Sunil Mittal-led company, which has fully provided for the AGR dues of ₹43,980 crore.

Analysts believe that Vodafone Idea will need to more than double its average revenue per user (Arpu) to meet its AGR repayment obligations. Vodafone’s Arpu fell to ₹114 in the June quarter from ₹121 in the fourth quarter of fiscal year 2020.