Vodafone Idea might soon get around $400 million in fresh capital from its promoters, including the Aditya Birla Group (ABG) and the Vodafone Group Plc. The third-largest telco’s future has stabilised a little post the announcement of the relief package from the government. Now, as per a fresh report from Livemint, Vi might get over $400 million from its promoters. The promoters might inject the fresh capital to retain their 27.66% (ABG) and 44.39% (Vodafone Group Plc) stake in the company as outside investors give the company their money.
Birla Might Invest in Vodafone Idea from Unlisted Promoter
Kumar Mangalam Birla, chairman of the ABG, might invest in the company using an unlisted promoter company. As per the publication’s report, none of the listed entities is going to invest in the company.
This money for Vodafone Idea could be utilised for capex related to enhancing 4G networks and coverage throughout India. Further, Vi could invest in research and development (R&D) for building and discovering relevant use-cases of 5G for the Indian market.
If the promoters invest in the company, it will send a good message out to everyone. This will attract outside investors. Further, if there’s a tariff hike, it will put the entire telecom industry in a stable position on the back of the relief package. More relief measures for the telecom sector are about to make their way in the coming months.
All of this will incentivise the outside investors to invest in a company such as Vodafone Idea, which can have a huge upside in the market if it starts adding subscribers and can grow its average revenue per user (ARPU) at the same time.
The third-largest telecom operator has still not been able to raise Rs 25,000 crores from outside investors. But now, that might change as the industry is becoming more and more investor-friendly.