Vodafone Plans to Raise Fresh Cash on its Indian Unit
Vodafone Group Plc targets to raise $1.5 billion in the country with a highly competitive wireless market.
India’s largest telecomm company, Vodafone Idea Ltd, eyes expansion. It is currently working on its funding plan reported to entail a share sale.
As it seeks to identify potential partners who will buy stakes, the firm is said to be under the guidance of a New York-based investment bank to gain overseas investors’ support.
The appointments can start anytime in the next few days. Moreover, it could involve five investment advisers from the world’s leading banks.
Its equity strategy will be the first leg of raising funds. It will venture to other mechanisms such as equity-linked securities, debt route, and tap the bond market as it goes along with the plan.
While the news circulated the market, Vodafone’s shares instantaneously spiked 27% on the Bombay Stock Exchange. It closed at 12.88 Indian rupees, recording its 52nd week high.
The move by the Mumbai-based firm is primarily propelled by the Supreme Court’s verdict to give the firm another10 years limit to pay their adjusted gross revenue dues totaling to $19 billion.
India’s Competitive Telecomm Market
After its stocks rallied to its biggest gain since March on Thursday, Vodafone Idea stalled by 9.9% as stocks worldwide experienced a disordered retreat.
For the record, the service provider has so far fallen roughly 85% since 2016. The strict competition in the Indian telecomm market when Ambani-backed Jio entered into the force really drove this fall.
Although new in the field, Reliance Jio Infocomm Ltd strategically positioned itself as a low-cost provider. They did this through offering free calls and affordable data packages.
Thus, it garnered the support of a significant percentage of the total market segment in a short period.
Vodafone Idea Ltd is a joint venture between Vodafone Group Plc and Indian billionaire Kumar Birla’s conglomerate Aditya Birla Group.