Vodafone Idea Issues ₹2,458 Crore in Shares to Nokia and Ericsson to Boost 4G & 5G Expansion

MUMBAI: Vodafone Idea Ltd (VIL) plans to raise up to ₹2,458 crore by issuing shares to its European equipment suppliers, Nokia and Ericsson, to settle some of their outstanding bills and support its 4G expansion and 5G rollout.

Vodafone Idea’s Share Issue

Vodafone Idea’s board has approved the issuance of 1.66 billion shares at ₹14.80 each to Nokia and Ericsson. Nokia will invest ₹1,520 crore, and Ericsson will put in ₹938 crore. This share price is 35% higher than the ₹11 per share price set in the April follow-on public offer (FPO) and comes with a six-month lock-in period.

Impact on Shareholding

After this transaction, Nokia and Ericsson will own 1.5% and 0.9% of Vodafone Idea, respectively. The promoters, Aditya Birla Group and the UK’s Vodafone Group Plc, will own 22.8% and 14.5%, while the government will hold 23.2%. The public will hold the remaining 37.1%.

Financial Background

With this new share issue, Vodafone Idea will have raised around ₹24,000 crore in equity recently. The company is also in talks with lenders to raise ₹25,000 crore in debt.

Long-Term Partnerships and Use of Funds

“Nokia and Ericsson are long-term partners and key suppliers for VIL. This share allotment will help VIL clear part of its dues to them,” Vodafone Idea said. “It will also support our plans to build a top-quality 4G and 5G network, contributing to India’s digital transformation.”

Outstanding Dues and Cash Position

Vodafone Idea owed over ₹1,200 crore to Ericsson and around ₹3,000 crore to Nokia. With only ₹167.8 crore in cash at the end of March, the company has struggled to pay its suppliers, limiting its ability to buy new equipment. This has caused its 4G network to lag behind competitors like Reliance Jio and Bharti Airtel, and it has not yet launched 5G services.

Subscriber Loss and Future Plans

Vodafone Idea had 212.6 million subscribers as of March, having lost over two million users since December. Despite these challenges, the company has plans to boost its competitiveness through recent fund-raising, including an ₹18,000 crore FPO and a ₹2,075 crore investment by the Aditya Birla Group.

VIL aims to set up 26,000 new 4G sites, upgrade 40,800 existing sites, and establish 22,000 new 5G sites in the next two years. The cost for each 4G site is ₹14.5 lakh, with ₹13 lakh for equipment and ₹1.5 lakh for services.

“This is a positive move for VIL and beneficial for Nokia and Ericsson as well,” said Rohan Dhamija, head of India and the Middle East at Analysys Mason. “It should help VIL secure new 4G contracts and initial 5G deals quickly, essential for reducing customer losses and staying competitive.”

CEO’s Statement

“VIL is prepared to grow with the right investments in expanding 4G coverage and offering 5G experiences to our customers while focusing on our execution capabilities,” said CEO Akshaya Moondra. “Support from key stakeholders is crucial, and the agreements with Nokia and Ericsson affirm their roles as long-term partners, paving the way for our next growth phase.”