Buzzing: Here’s Why Vodafone Idea is Tanking 7% on Friday

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Buzzing: Here’s Why Vodafone Idea is Tanking 7% on Friday
Credit: © Reuters.

By Malvika Gurung

Investing.com -- Shares of the beleaguered telecom company Vodafone Idea (NS: VODA ) tanked 6.8% to Rs 10.35 apiece at 11:15 am on Friday, after the company’s Board of Directors approved to raise Rs 4,500 crore by issuing shares to its promoter group entities.

Global brokerage Nomura Holdings (T: 8604 ) believes that the promoter infusion at a 10% premium is not enough to revive Vodafone Idea, and has maintained its ‘Reduce’ call on the stock, at a target price of Rs 8, a downside of 23% compared to the current price.

The beleaguered telco has external debt repayments of about Rs 5,400-5,700 crore in FY23-24, stated the brokerage.

On Thursday, Vi’s board approved the issuance of upto 3.39 billion shares to its promoters Vodafone Group (LON: VOD ) and Aditya Birla Group on a preferential basis.

The shares will be issued at Rs. 13.3 apiece and a face value of Rs 10 each to Euro Pacific Securities for an aggregate amount of Rs.4,500 crore.

The company’s board also approved raising Rs 10,000 crore by issuing equity shares and debt instruments in one or more tranches. An extraordinary general meeting is scheduled on Mar 26 to approve the matters listed above.

Besides, last week, promoter Vodafone Group raised Rs 1,420 crore by selling a 2.4% stake in Indus Towers and has plans to sell another 4.7% stake in the tower company to Bharti Airtel (NS: BRTI ), for using the proceeds to clear Vodafone Idea’s unpaid dues.

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  • Aditya Desai @Aditya Desai
    Have saved this report to come back to when the stock crosses ₹20
    Like 5
    • selva nath @selva nath
      For sure the stock price gonna boom by the end of march month
      Like 1
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