Vodafone Idea with Amazon, PEs to raise Rs 20,000 cr investment
- ByStartupStory | May 31, 2022
American retail giant Amazon and a group of investors have negotiated with Aditya Birla Group to invest up to 20,000 rupees in the sick mobile operator Vodafone Idea. Banks say the proceeds from the sale will be used to bid on the upcoming 5G spectrum auction and invest in rolling out the service by the end of the year. Apart from Amazon, the group is in talks with private equity investors seeking to gain exposure to India’s telecommunications sector.
Vodafone Idea’s shares fell 4.14% at Rs 9.3 per share, with a valuation of Rs 29,870 on Monday. New investors questioned the role of the government when it invested in the company instead of paying fees. We have set a deadline for calculating the net present value (NPV) of shares to be converted into shares (by the government) on January 10.
In March of this year, the Ministry of Telecommunications ordered the company to return the financial bank’s guarantee associated with the previous spectrum auction. To date, a bank guarantee worth 16,000 crores has been returned, providing financial support to the company.
Also, two promoters, Aditya Birla Group and Vodafone have invested in a telecommunications company through a new preferred capital injection of Rs 4,500. The shares were issued to the promoter at Rs 13.3 per common stock. Of this amount, Vodafone donated Rs 337.5 billion and Aditya Birla Group donated Rs 112.5 billion.
Promoter co-participation after the priority issue is 74.99%. After converting interest into stock, the state stock is expected to be 33 percent.
The company is keen to invest in 5G technology-based services after successful testing in Pune and Ganginagar. Following the 5G price talks, India’s Telecommunications Regulatory Authority (Trai) has considered some demands from the industry, and prices in the 5G spectrum have fallen 36% from initial estimates.
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