Vodafone Idea share price climbs over 2%; here’s why
Vodafone Idea share price climbed over 2 per cent as the company announced raising funds up to ₹1,980 crore by issuing 175.53 crore shares at ₹11.28 each to Vodafone Group entities. This move is expected to boost the company's financial standing amidst ongoing challenges.
Vodafone Idea share price climbed over 2 per cent in early trade on Tuesday, December 10, a day after the company announced its board of directors had approved the issuance of up to 175.53 crore shares on a preferential basis to two Vodafone Group entities to raise up to ₹1,980 crore. Vodafone Idea share price opened at ₹8.25 against its previous close of ₹8.10 and rose 2.35 per cent to the level of ₹8.29. Around 9:25 am, the stock traded 1.11 per cent up at ₹8.19 on the BSE.
The company has fixed the issue price at ₹11.28 per equity share. It also clarified that the relevant date for determining the floor price for the preferential issue was December 6, 2024.
"The board of directors approved the issuance of up to 1,75,53,19,148 equity shares of face value of ₹10 each at an issue price of ₹11.28 per equity share (including a premium of ₹1.28 per equity share) for an aggregate consideration of up to ₹1,980 crore on a preferential basis to Omega Telecom Holdings Private Limited (up to ₹1,280 crore) and Usha Martin Telematics Limited (up to ₹700 crore), Vodafone Group entities and promoters of the company," said the company in an exchange filing after market hours on Tuesday.
After the allotment of securities, the stake of Omega Telecom Holdings Private Limited in the company will rise to 1.98 per cent from 0.40 per cent before the allotment. Similarly, the stake of Usha Martin Telematics Limited will rise to 1 per cent from 0.13 per cent.
This fundraising is a positive development for the debt-ridden telecom operator as it navigates financial challenges.
Vodafone Idea share price trend
Vodafone Idea's share price has been under pressure for the last few years as the company faces financial challenges.
According to Trendlyne, an equity research platform, the stock is down 49 per cent in the last six months. It hit a 52-week high of ₹19.18 on June 28 but saw significant selloff thereafter. It plumbed its 52-week low of ₹6.61 on November 22 this year.
Vodafone Idea Q2FY25 result
The company's consolidated loss narrowed to ₹7,175.9 crore in Q2FY25, mainly due to an increase in average revenue per user (ARPU) after a tariff hike in July. The company had posted a loss of ₹8,746.6 crore in the same period a year ago.
The company's revenue from operations increased to ₹10,932.2 crore during the quarter from ₹10,716.3 crore a year ago.
Vodafone Idea increased mobile service rates by 11-24 per cent from July 4. The company's mobile customer ARPU, excluding machine-to-machine, increased 7.8 per cent to ₹166 on a quarter-over-quarter basis from ₹154 in the April-June period. The overall subscriber base declined to 20.5 crore from 21 crore and 4G subscriber base to 12.59 crore from 12.67 crore sequentially.
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