Why Vodafone Idea Shares Are Falling While Indus Towers Rises: Key Details Explained

Why Vodafone Idea Shares Are Falling While Indus Towers Rises: Key Details Explained

After the firm announced that it will examine a fundraising request of up to Rs 2,000 crore during a board meeting on December 9, shares of Vodafone Idea (Vi) fell 3% to Rs 8.15 on Thursday in intraday trading on the BSE. Since its launch, the stock has dropped 7% from its initial price of Rs 8.79. On the other hand, the BSE Sensex was stable, up 0.01% at 80,966 at 09:47 AM.

The fundraising campaign entails preferentially offering convertible securities or equity shares to companies that are part of the Vodafone Group, one of Vi’s backers. This indicates that Vodafone Plc. may be contributing funds to support the telecom business.

Indus Towers Shares Rise Amid Vodafone Stake Sale

Indus Towers’ stock increased by about 2% to trade at Rs 364.40 on the BSE, while Vi’s shares fell. After the Vodafone Group announced that it will sell its remaining 79.2 million shares in Indus Towers through an expedited bookbuild offering, the stock reached its top at Rs 376. In addition to supporting Vi’s financial reorganization, this transaction, which represents 3% of Indus’ outstanding share capital, intends to pay back Vodafone’s $101 million in outstanding borrowings.

Indus Towers verified in an exchange filing that Vodafone Promoters had released a 3.003% share promise, enabling them to move forward with the transaction. To help Indus Towers pay its outstanding debts, Vodafone said that any remaining $200 million from the share offering would be invested as new stock in Vi. Vi owes Indus Towers more than Rs 7,000 crore in total.

Future Growth Prospects for Vi

Vi intends to use the money raised as leverage to lessen its heavy debt load. Over the following 15 months, the business also plans to raise tariffs by 15–20%, which may increase free cash flow, EBITDA, and revenue. Vi’s 4G deployment plan is anticipated to increase the subscriber base and boost customer retention despite obstacles including high customer turnover.

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Reducing Vi’s obligations by a quarter with the capital infusion is a good move, according to ICICI Securities. Vi’s gross subscriber gains are still good, the brokerage firm noted, and the impending tariff rise may help the company’s financial standing even more.