Vodafone Idea Ltd (Vi) has announced its plan to infuse ₹14,000 crore (US$1.8 billion) in equity as part of its business revival strategy. The infusion will be divided equally between the company’s existing promoters, Aditya Birla Group (ABG), and UK’s Vodafone Group Plc.
The primary objective of this equity infusion is to alleviate Vi’s debt burden, which currently stands at ₹2.2 trillion (US$29.4 billion) as of March 31, 2023. Vi has been facing fierce competition from rivals Reliance Jio and Bharti Airtel, who have been offering lower tariffs and superior services.
Alongside the equity infusion, Vi’s revival plan includes initiatives to enhance network quality and customer service. The company intends to invest ₹10,000 crore (US$14.7 billion) over the next three years in network upgrades.
Furthermore, Vi is exploring a rights issue to raise ₹4,000 crore (US$5.8 billion), which will be available to existing shareholders at a discounted price compared to the current market value.
The implementation of Vi’s revival plan holds promise for the Indian telecom sector. As the third-largest telecom operator in India, Vi’s resurgence will contribute to enhanced competition in the market.
Key Points of Vi’s Revival Plan:
- ₹14,000 crore equity infusion from existing promoters
- ₹10,000 crore investment in network upgrades
- ₹4,000 crore rights issue
The equity infusion and network upgrades are expected to enhance Vi’s network quality and customer service. Additionally, the rights issue will aid the company in reducing its debt burden.
The revival plan of Vi is a positive development for the Indian telecom sector, given the company’s status as the third-largest telecom operator in the country. Its resurgence will help foster healthy competition within the market.
