Vodafone Idea rises 4% ahead of board meet to raise funds

Shares of Vodafone Idea gained over 4 per cent today as the board of the telco is scheduled to meet on June 22, to consider and approve a proposal for raising funds to the tune of Rs 500 crore. Vodafone Idea share touched an intraday high of Rs 8.33, rising 4.28 per cent on BSE.

The telecom stock has gained after 3 days of consecutive fall.

Vodafone Idea stock is trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages. It has lost 18.58 per cent in a year and fallen 46.13 per cent in 2022.

Total 157.16 lakh shares of Vodafone Idea changed hands amounting to a turnover of Rs 12.93 crore on BSE. The market cap of the telco rose to Rs 26,562 crore.

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).

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"... A meeting of the Board of Directors of the company is scheduled to be held on Wednesday, 22nd June 2022... to consider a 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.

The move comes as the Indian telecom market is poised for a 5G spectrum auction and subsequent rollout of new-age offerings.

Vodafone Idea has been looking for investors to raise capital and repay debt. It also plans to utilise proceeds of the fundraising for investing in the network. In January, the government had helped the telco to return from the brink of bankruptcy.

The telco logged a consolidated loss of Rs 6,563 crore in Q4 against a loss of Rs 7,023 crore in the corresponding quarter of last fiscal. Revenue from operations rose to Rs 10,240 crore in Q4 from Rs 9,608 crore a year ago, a growth of 6.5 per cent YoY, supported by tariff hikes effective from November 25, 2021.