Vodafone Idea secured board approval to raise INR250 billion ($3.5 billion) through a rights issue, as the newly formed market leader looks to keep pace with rival Reliance Jio’s continued growth.
The company became the largest mobile operator in India by subscriber numbers after completing a merger in August 2018. In a filing on the Indian stock exchange, it said its directors approved the proposal to raise funds, with Vodafone Group and Aditya Birla Group (which owned Idea Cellular prior to the merger) also committing to invest up to INR110 billion and INR72.5 billion respectively, as part of the rights issue.
Vodafone Idea was rumoured to be exploring raising additional funds after reporting a post-tax loss of INR49.7 billion in its fiscal Q2 2019, ending 30 September.
It is also seeking additional time to make spectrum payments to the country’s regulator, as it suffers with high debt and weakened profitability.
Indian operators have struggled to compete with an aggressive strategy by Reliance Jio, which entered the market in 2016 with a range of low-cost data offers. Last week, the operator reported its net profit jumped 65 per cent year-on-year in its fiscal Q3.
Vodafone Idea separately announced it plans to sell its 11.5 per cent stake in Indus towers, a company it jointly owns with Bharti Infratel.Subscribe to our daily newsletter Back