Vodafone Idea to issue shares worth Rs 2,458 crore to Nokia and Ericsson

Vodafone Idea Ltd (VIL) will issue preferential shares worth ₹2,458 crore to two of its vendors — Nokia Solutions and Networks India Private Ltd (Nokia) and Ericsson India Private Ltd (Ericsson), to help pare debt.

The VIL board on cleared the preferential allotment of up to 1,66,08,10,804 shares at an issue price of ₹14.80 per share.

Of these, up to 1,02,70,27,024 shares worth ₹1,520 crore will be issued to Nokia and up to 63,37,83,780 shares aggregating to ₹938 crore will be issued to Ericsson. The board also approved an extraordinary general meeting to be held on July 10 for the allotment.

VIL said in a statement that the preferential allotment price is higher by around 35 per cent to the follow-on public offering (FPO) price and comes with a lock-in period of six months.

While both Nokia and Ericsson have a long-term partnership with VIL, the telco said that as key suppliers of network equipment, the preferential allotment will enable it to clear part of their outstanding dues.

VIL added that the allotment would also bolster its capex rollout for a top quality 4G & 5G network.

After this preferential issuance, the shareholding of Nokia and Ericsson in the company will be 1.5 per cent and 0.9 per cent, respectively. The promoter’s (Aditya Birla Group and Vodafone) shareholding will stand at 37.3 per cent, while the shareholding of the government of India will be at 23.2 per cent. The balance 37.1 per cent will be held by the public.

With this equity issuance, VIL has raised close to ₹24,000 crore of equity, including conversion of 1,440 optionally convertible debentures (OCDs) in March 2024 by ATC India (out of 1,600 OCDs issued), the FPO issue in April and preferential issue to the Aditya Birla group in May.