Vodafone Idea (Vi), the third-largest telecom operator in the country, recently concluded its FPO (follow-on public offer) of Rs 18,000 crore.
Birla is also the chairman of Vodafone Idea Limited (VIL).
Read More - Vodafone Idea Needs Tariff Hikes: AnalystsWhat Will be the Funds Used For?
"On the back of this fund raise and continued support from banks, Vodafone Idea will stage a smart turnaround.
I believe that a revitalized Vodafone Idea is important for India," added Birla.
Vodafone Idea (Vi), the third-largest telecom operator in the country, recently concluded its FPO (follow-on public offer) of Rs 18,000 crore. It is the largest FPO in the country so far and was subscribed 7 times overall and about 19 times by institutional investors. Kumar Mangalam Birla, Chairman of the Aditya Birla Group (ABG), said, that the response to the FPO demonstrates the potential of the India digital story and Vodafone Idea's role. Birla is also the chairman of Vodafone Idea Limited (VIL).
He thanked the Indian government for coming up with a reform package that addressed the liquidity issues as well as litigation issues for the sector. Further, Birla said, "I thank the honourable Prime Minister Shri Narendra Modi ji, the Honourable Finance Minister Smt. Nirmala Sitharaman and the Honourable Telecom Minister Shri Ashwin Vaishnaw for their leadership and unequivocal commitment to preserving a competitive 3-player market."
The government of India accepted a stake in the cash-strapped telco and reduced the interest dues helping the company in reducing its overall debt. This ensured that India remained a three-player market.
Read More - Vodafone Idea Needs Tariff Hikes: Analysts
What Will be the Funds Used For?
The funds raised by Vi through this FPO will be used for capex, rather than paying off debt. Birla confirmed that the funds raised are earmarked for a significant capital expenditure cycle. Vi will upgrade the network across key markets, resulting in more efficiency in the operations.
"On the back of this fund raise and continued support from banks, Vodafone Idea will stage a smart turnaround. This moment in some ways, marks the beginning of Vodafone Idea 2.0. I believe that a revitalized Vodafone Idea is important for India," added Birla.
Read More - Vodafone Idea Raises Rs 5400 Crore from Anchor Investors
Vodafone Group and Aditya Birla Group, the two promoters of Vi, have cumulatively invested around Rs 1,70,000 crore in the Indian telecom industry. Much recently, Vi also got Rs 2,000 crore from an Aditya Birla Group Entity. The telco has raised about Rs 20,000 crore through equity instruments, and will further look to raise anothe Rs 25,000 crore through debt.
