The government has approved a proposal by Vodafone Idea (VI) for investment of up to Rs 15,000 crore through the Foreign Direct Investment (FDI) route. The telco’s stock rose over 6% following this news. Sources revealed that, the government’s approval is a competent approval and no fundraising deal has been sealed yet. “When the fund raising was announced, the board said There was that the maximum capital to be raised from a single source is Rs 15,000 crore and hence the approval had to be taken.”
The company had a loss of Rs 6985.1 crore in the fourth quarter of the last financial year as against Rs 4540.8 crore in the December quarter. The company’s revenue in the March quarter declined by 11.8 percent to Rs 9.610 crore as compared to the previous quarter. The total debt of the company increased to Rs 1.8 lakh crore from Rs 1.17 lakh crore in the previous quarter. The reason for the huge increase in debt was that the company has shown AGR dues of Rs 60 thousand crore as debt.
A month ago, it was said that Vodafone Idea Limited was planning to bring in qualified institutional placement of shares to raise up to Rs 7000 crore to meet the financial requirements. Vodafone Idea Limited is a joint venture between Aditya Birla Group and Vodafone Plc of UK.
Last year, the Supreme Court ordered telecom companies to pay 10 per cent of their total AGR dues by March 21, 2021 and the rest in annual installments from April 1, 2021 to March 31, 2031. These installments will have to be paid by 31st March of each subsequent financial year. After this the company got stuck in financial crisis.
Talking about AGR, then this Adjusted Gross Revenue (AGR) is the licensing and usage fee charged by the Department of Telecommunications (DoT) from telecom companies. Apart from this, spectrum usage charges (between 3 to 5 per cent) and licensing fees, which account for 8 per cent of the total profit, are also considered as part of AGR.
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