Corporate Grapevine     

Published: May 31, 2025
Updated: May 31, 2025

VI parents sitting on equity infusion

Vodafone Idea Ltd’s promoters, the Aditya Birla group and UK-based Vodafone Plc, are holding off on committing to a planned Rs 20,000 crore ($ 2.4 billion) equity infusion until the Indian government outlines support measures for the struggling telecom operator.

The move is seen as critical to reviving the company’s operations and addressing its mounting dues and debt, but promoter participation hinges on clarity around potential relief or incentives from the government. The government may increase its stake to 75 per cent while Vodafone Plc and the Birla group are expected to dilute their stakes further. In March this year, Vodafone Idea announced that the government had agreed to convert $ 4.3 billion of the telecom operator’s outstanding spectrum dues to equity, thus picking up 48.99 per cent of the company’s equity. The Vodafone group and ABG’s shareholding in Vodafone Idea was diluted to 16.1 per cent and 9.4 percent respectively.

Apart from the equity fund raise, the company is also planning to raise Rs 25,000 crore from the banks. At the forthcoming shareholders’ meeting, the company will also seeking shareholder approval to alter the company’s Articles of Association (AoA), enabling the promoters to retain gover nance and management rights.

The proposed capital raise is expected to be crucial for Vodafone Idea as it looks to improve its network infrastructure, invest in a 5G rollout, and address outstanding dues. The planned equity/debt fundraise is part of Vodafone Idea’s broader effort to strengthen its balance sheet and support investments in network expansion and a 5G rollout. The move comes as the cash-strapped telecom operator continues to battle intense competition and legacy dues.

In case the company goes for another round of equity fundraise, the stake of both promoters will dilute further but they will continue to retain management rights.