Shares of beleaguered telecom company Vodafone Idea rallied 10.13% on the Bombay Stock Exchange (BSE) on Wednesday’s early deals to reach an intraday high of ₹ 8.48 apiece, after reports suggested that its promoters will likely infuse equity worth ₹ 14,000 crore in the near-term, in order to revive the business. At 11:30 AM, its shares were trading at ₹ 8.08 apiece.
The company’s promoters and promoter group collectively hold a 50.36% stake in it. The Aditya Birla Group (ABG) and UK’s Vodafone Group Plc will infuse half of the overall amount, suggested a report by ET.
According to the report, the revival plan was submitted to the government earlier this month. It noted that the promoters have already invested ₹ 5,000 crores as fresh equity since the government’s telecom revival package in September 2021, and ABG and the Vodafone group will invest ₹ 2,000 crores soon.
Moreover, the promoters will work with the company as part of the revival plan to raise another ₹ 7,000 crores either as direct equity or through convertible structures from external investors.
Kumar Mangalam Birla, the Chairperson of ABG recently returned to the board of Vodafone Idea as an additional director, with effect from April 20, turning sentiments positive around the stock.
Moreover, data shows that mutual funds lapped up additional shares of Vodafone Idea. Their shareholding increased to 28.64 crore shares in May 2023, from 20.48 crore shares in April 2023.
Vodafone Idea’s shares witnessed turbulence in the past year. They reached a 52-week high of ₹ 10.08 apiece on September 13, 2022, and a 52-week low of ₹ 5.7 on March 31, 2023.
The telecom operator reported a consolidated net loss of ₹ 6,419 crores for the fourth quarter of FY23, versus a loss of ₹ 6,563 crores in the same period a year ago. Its revenue growth remained muted at ₹ 10,532 crores, up 3% year on year (YoY).
Written By Simran Bafna
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