The shareholders of Vodafone Idea have approved a proposal to issue securities worth about £2 billion, the debt-laden telecom services provider said in an exchange filing, a day after the company's virtual extraordinary general meeting (EGM).
India's third-largest telecom company would use the much-needed funding to reduce its liabilities, launch 5G services commercially and better compete with the larger rivals by stemming market-share loss.
“The resolution mentioned in the EGM notice stands passed with requisite majority," the Aditya Birla Group-promoted company said. Vodafone Idea’s board had approved a £4.5 bn fundraising initiative, including a £2 bn equity-based capital infusion from existing investors, on February 27. With the approval in place, the telecom company is expected to complete the equity fundraise by the end of June.
Existing promoters will be involved in the equity fundraise, the company had said earlier. It remains unclear whether promoters will include Britain's Vodafone Group Plc as well.
The cash-strapped, loss-making mobile phone services provider is the laggard among peers with its biggest challenge being a ₹2.1 trillion debt and falling subscriber base. As per latest data from Trai, the carrier lost 1.5 million users in January this year, up from a 1.4 million subscribers it lost in December 2023. Its total subscriber base stands at 221.5 million as of January, lower than the second-largest telecom firm Airtel that has 382.5 million users, and market leader Reliance Jio that has 464 million users.
