Are good days coming for Vodafone Idea?
Vodafone Idea news: Vodafone Idea (Vi) has been burdened with huge financial crisis and debt for a long time, but now a very relieving news has come from the market for the company. Big investors of the country have opened their treasury expressing confidence in the credibility of the company. It is reported that a reputed financial institution like Tata Capital has made a huge investment of about Rs 500 crore in the latest bond sale of Vodafone Idea. Overall the company has raised Rs 3,300 crore from the market.
These giants also bet with Tata
Tata Capital is not alone in this fundraising, but many other big players of the financial world have also come forward to help Vi. According to reports, JM Financial Credit Solutions, Aditya Birla Capital and Hero Fincorp have also committed to invest about Rs 400 crore each. Apart from this, Nomura Capital has also participated in this funding round through its foreign and NBFC route. The move shows that even though mainstream banks are hesitant in lending, non-banking financial companies (NBFCs) still have faith in Vodafone Idea’s future and its returns.
12% interest offer
This entire process was completed through ‘Vodafone Idea Telecom Infrastructure’, a wholly owned unit of Vodafone Idea. The bonds were issued in two tranches. Rs 3,000 crore was raised under ‘Series A’, on which investors will get an attractive interest of 12%. At the same time, Rs 300 crore was raised in ‘Series B’ at 7% interest rate. The tenure of these securities is about 21 months and there is also the facility of call option after one year. The company will mainly use this amount for payments related to transfer of fiber assets and improving its network (Capex Plans).
Are good days coming for Vodafone Idea?
While on one hand banks are pulling back due to their ‘exposure limits’ and asset quality concerns, mutual funds and NBFCs are willing to take risks for higher returns. This fund is like a lifeline for Vodafone Idea. Recall that in April, the government had taken 48.99% stake in the company by converting spectrum dues into equity. Apart from this, the Supreme Court has recently indicated to consider the petition to provide relief on AGR dues. If this new fund is used properly in improving the network, then in the coming days, common users suffering from call drop and internet speed problems can get great relief.
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