Debt-ridden Vodafone Idea's board is scheduled to meet on June 22 to consider a proposal for raising funds to the tune of Rs 500 crore from Vodafone Group.

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The fundraising will be through the issuance of equity shares or convertible warrants on a preferential basis to one or more entities belonging to Vodafone Group (one of the promoters of the company).

"... A meeting of the Board of Directors of the company is scheduled to be held on Wednesday, 22nd June 2022... To consider proposal for raising of funds aggregating up to Rs 500 crore, by way of issuance of equity shares and / or convertible warrants on a preferential basis to one or more entities belonging to Vodafone Group (one of the promoters of the company)," VIL said in a filing to BSE on Sunday evening.

Over the last few months, Indian telecom operators have been adding more firepower to their arsenal as the market gears up for rollout of 5G services that will usher in ultra high-speeds and spawn new-age offerings and business models.

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The Cabinet, last week, approved the auction of airwaves capable of offering fifth-generation or 5G telecom services and gave its nod for setting up of captive 5G networks by the tech firms.

The auction of over 72 GHz of the spectrum will commence on July 26, 2022.

The Cabinet has approved 5G auctions at reserve prices recommended by the sector regulator Telecom Regulatory Authority of India (TRAI).

TRAI had recommended about a 39 per cent reduction in the reserve or floor price for the sale of 5G spectrum for mobile services.

The 5G services will usher in ultra high speeds, nearly 10 times faster than 4G.

Icra has estimated that telecom industry is likely to shell out around Rs 1-1.1 lakh crore on the 5G auction, despite telcos' reservations over high spectrum prices, and that sector debt level is likely to rise with upcoming auctions.

After experiencing a prolonged bout of financial stress, the telecom service providers - particularly Vodafone Idea - got a shot in the arm with the government, last year, approving a blockbuster relief package that included a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid, and 100 per cent foreign investment through the automatic route.

Following this, debt-ridden Vodafone Idea (VIL) opted for converting about Rs 16,000 crore interest dues liability payable to the government, into equity. This will result in the government holding about 33 per cent stake in the company.

Sources at the Department of Telecommunications (DoT) recently said VIL's equity conversion proposal is in final stages, and required approvals on the same are expected as early as 7-10 days.

In March this year, Vodafone Idea board had approved raising up to Rs 14,500 crore, including Rs 4,500 crore from promoter entities -- Vodafone and Aditya Birla Group.