Shares of Vodafone Idea (Vi) are expected to remain in focus in the upcoming trading session after a report by The Economic Times said that several domestic and international investors are in discussions to acquire a potential stake in the debt-laden telecom operator.
According to the report, ST Telemedia and JSW Group have joined a group of investors exploring a possible investment in Vodafone Idea. The investor interest comes after the company recently received significant financial relief from the Government of India, which is currently its largest shareholder.
The discussions are said to be exploratory in nature and there is no certainty that a deal will materialise. Apart from ST Telemedia and JSW Group, US-based Tillman Global Holdings is also reportedly evaluating an investment opportunity in the telecom operator, the report added. A few other large domestic business houses are also believed to be in the race, though their names have not been disclosed.
People familiar with the matter told The Economic Times that there are “a few serious suitors” and that talks are currently underway with multiple parties simultaneously. As part of its fundraising efforts, Vodafone Idea’s management is scheduled to meet institutional investors in Singapore and Hong Kong on March 16 and 17.
The Government of India currently holds nearly a 49% stake in Vodafone Idea after converting part of the telecom company’s dues into equity. The Centre has been looking for a strategic investor who could inject fresh capital into the company and support its operations.
Vodafone Idea is promoted by the Aditya Birla Group and the UK-based Vodafone Group, which hold stakes of 9.50% and 16.07%, respectively.
According to the report, it is still unclear whether the promoters would dilute their existing holdings or whether the investment would come through a fresh issuance of equity.
Earlier, The Economic Times had reported that the government was exploring the possibility of bringing in a strategic investor willing to invest around $1 billion for an 11–13% stake in the telecom operator.
The report also noted that if a strategic investor infuses around ₹50,000 crore in fresh equity, the government could convert nearly ₹48,000 crore of Vodafone Idea’s spectrum liabilities into equity without increasing its stake beyond 49%. Such a move could also reduce the company’s spectrum-related liabilities by around 40%. The developments are likely to keep Vodafone Idea shares under the spotlight when markets reopen.