Vodafone Idea on radar after board gives nod to Rs 20,000 crore fundraise; what should investors do?

Vodafone Idea fund raise news, Vodafone Idea share price, Vodafone Idea news: Vodafone Idea shares fell on Wednesday, February 28, a day after the private sector telecom company's board gave a nod to a plan to raise funds up to Rs 20,000 crore through equity and or equity-linked instruments. The Vodafone Idea stock dropped as much as 14.9 per cent to Rs 13.5 apiece on BSE. Vodafone Idea shares ended at Rs 13.65, down 13.99 per cent.

"The Board has also authorised the management to appoint various intermediaries, including bankers and counsels, to execute the fundraise. The Company will call for a meeting of its shareholders on April 2, 2024, and post-shareholder approval, it expects to complete the equity fund raise in the coming quarter,” said Vodafone Idea in a statement released post-market hours on Tuesday.

The promoters will also participate in the proposed equity raise, as committed earlier, the company added.

Plans to raise around Rs 45,000 crore

Vodafone Idea also said that it plans to raise Rs 45,000 crore through equity and debt, and remains actively engaged with its lenders to tie up the debt funding, which will follow the equity fundraise. Read more

Vodafone Idea share price target: What should investors do with Vodafone Idea shares? Here's how brokerages view the stock

After the announcement, CLSA maintained a 'sell' call on the Vodafone Idea stock with a target of Rs 5. The company has been in talks with potential investors, but fundraising is still pending, according to the brokerage. The brokerage expects a financial crunch in FY26CL when annual spectrum and adjusted gross revenue-related payments will be due. Over 12 months, Vodafone Idea has taken a hit of 120 bps in its revenue market share, CLSA added.

Nomura maintained a 'reduce' rating on Vodafone Idea shares with a target of Rs 6.5. A change of fortunes is now on the cards for the telecom company, and repair, recovery and the 5G rollout are key monitorables after it secures funding, according to the brokerage. Nomura also said that it will be a significant positive for Vodafone Idea if it is able to bring in external investors.

What does Vodafone Idea do?

Vodafone Idea is an Aditya Birla Group and Vodafone Group partnership.

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