Vodafone Idea slips 4% amid reports of fund raising plan hitting a snag

Shares of Vodafone Idea (Vi) slipped over 4 per cent to Rs 10.53 on the BSE in intra-day trade on Friday amid reports that the debt-laden telco’s fund-raising plans have landed in a soup.

Vi’s talks with the Oak Hill consortium have not led to a binding agreement as there were unresolved issues around funding terms, guarantees and claims to the struggling telco’s assets in case of a payment default, a report by Economic Times stated.

The report added that while talks between the two sides have not fallen through completely, the telecom JV between UK’s Vodafone Group and Aditya Birla Group is already exploring other potential funding partners and is confident of securing funding by the end of this month, according to its sources.

The exclusive period for talks between the group of potential lenders consisting of Oak Hill, Pacific Investment Management Co, Sixth Street, Twin Point Capital and Varde Partners and Vodafone Idea was extended by a month from January 30 to February 28 but no agreement could be signed, the report said.

Following this, the scrip slipped for the third day in a row. At 1.13 pm, the stock was down 3.27 per cent at Rs 10.64 per share as against a 0.24 per cent decline to 50,693 in the S&P BSE Sensex.

The company for the third quarter of FY21 had reported narrowing of consolidated loss to Rs 4,532.1 crore, mainly on account of a one-time gain from stake sale in Indus Towers. It had posted a loss of Rs 6,438.8 crore in the same quarter a year ago.

However, this had failed to enthuse analysts on the stock.

“While AGR dues payment extension was a short-term breather, its survival hinges on quick capital infusion and tariff hike implementation. The need for capitalisation is of paramount importance mainly due to its lagging spends on the network and relative market share loss. We will monitor triggers like fundraise, tariff hike, before changing our stance,” analysts at ICICI Securities had said in an earning note.