NEW DELHI: Vodafone Idea has emerged from one of the most difficult phases in its history and is now focused on executing its turnaround plan, non-executive chairman Kumar Mangalam Birla said on Thursday, as the telecom operator sought shareholder approval for a ₹4,730-crore promoter funding infusion.
Addressing shareholders at an extraordinary general meeting (EGM), Birla sought to project confidence in the company’s revival while acknowledging that challenges remain. This comes Vodafone Idea continues to pursue long-awaited bank financing and manage large spectrum payment obligations.
“I think we have good times ahead…there will continue to be a few challenges but I still believe that we are at a point of inflexion,” Birla said in his first EGM since taking over as non-executive chairman last month.
The EGM was convened to seek shareholder approval for a ₹4,730 crore investment by promoter group entity Suryaja Investments Pte Ltd through the issuance of 4.3 billion equity-convertible warrants at ₹11 apiece. The warrants will allow staggered promoter funding over 18 months, with 25%, or ₹1,182 crore, payable upfront.
Responding to shareholder queries, Birla said ₹1,730 crore of the proceeds would be used for capital expenditure, while the remaining ₹3,000 crore would go toward debt reduction.
He said the Aditya Birla Group’s shareholding would rise from 9.6% to about 13% upon full conversion of the warrants. The combined stake of the two promoter groups – Aditya Birla Group and Vodafone Plc – would increase to about 28.5%.
The government’s shareholding in the company currently stands at 49%. Upon full conversion of the warrants, that stake would fall to about 47%, leaving room for any future conversion of the company’s dues into government equity.
The promoter funding is widely viewed by analysts as a signal of support to lenders at a time when Vodafone Idea has struggled to secure bank funding needed for its turnaround. However, the ₹4,730 crore funding is not seen large enough to resolve the company’s structural challenges, Mint reported last month citing analysts.
Several retail shareholders at the meeting welcomed Birla’s return as chairman and expressed optimism that his leadership could aid the company’s recovery and support its share price.
Even so, Birla cautioned that the recovery remains a work in progress. “…in my annual reflections, I had said tough times don’t last, tough companies do. Those words resonate more strongly with our company today,” he said. “Across operations, customer service and network expansion, the company is pursuing its priorities with discipline and with purpose.”
On Thursday, shares of Vodafone Idea closed 2.5% higher at ₹14.23 apiece on the National Stock Exchange.
Balance sheet
The company has received significant relief on adjusted gross revenue (AGR) dues. On 31 December, the Centre froze Vodafone Idea’s AGR dues at ₹87,695 crore. In April, it reduced those dues by ₹23,600 crore to ₹64,046 crore following a recalculation and deferred the bulk of payments by 10 years, with repayments scheduled between FY36 and FY41.
Operationally, Vodafone Idea reported a subscriber base of 192.8 million in the January-March quarter (Q4FY26) and managed to arrest subscriber losses compared with the preceding quarter.
“The benefits of sustained investments in network infrastructure and rollout are now becoming increasingly visible, reflecting a stronger operational performance and improve customer service,” Birla said, adding that Vodafone Idea operates in one of the most consequential telecom markets in the world, serving under digitising India, a 1.4 billion people.
“The work of rebuilding has begun, your company now looks ahead with confidence,” he said.
Despite the AGR relief, analysts continue to flag the company’s deferred spectrum liabilities, which stood at ₹1.27 trillion at the end of March. Vodafone Idea faces spectrum payment obligations of about ₹49,000 crore over the next three years, including ₹7,000 crore in the first year, ₹15,000 crore in the second and around ₹27,000 crore in the third.
Last month, during its earnings call, Vodafone Idea outlined plans to generate and secure more than ₹1.08 trillion over the next three years to fund its turnaround. The company said the funding would come from tripling Ebitda to ₹60,000 crore during FY27-FY29, raising ₹35,000 crore through bank debt and a rolling line of credit facility, and securing ₹10,000 crore from the recent settlement with Vodafone Plc and expected income tax refunds.