Kumar Mangalam Birla, Chairman of Aditya Birla Group, hailed the recent Rs 18,000 crore fundraise by Vodafone Idea as a significant development for the company, describing it as a “fresh lease of life.” This fundraise, achieved through a follow-on public offer, is expected to provide the much-needed financial boost to Vodafone Idea, which has been facing stiff competition from rivals in the telecom sector.
Calling it as the beginning of ‘Vi 2.0’, Birla said the money raised will be invested in the business, which will trigger a cycle of growth.

“Vi will stage a smart comeback, this moment marks the beginning of Vi 2.0,” Birla said at the listing ceremony.

When asked if most of the problems for the company get sorted with the capital raise, Birla answered in the affirmative.

“And this is like a sort of fresh lease of life for the company,” he said.

Strategic Investments for Growth
Birla highlighted that the funds raised will be utilized to enhance Vodafone Idea’s network infrastructure, with a focus on expanding its coverage and introducing 5G services in select areas. This strategic approach, referred to as ‘Vi 2.0’ by Birla, aims to position Vodafone Idea for a strong comeback in the telecom market, where it competes with major players like Reliance Jio and Bharti Airtel.

“A nation of 1.4 billion people deserves three private telecom players,” he said, calling Vi as a “national asset” which serves 215 million people and possesses over 8,000 MHz of spectrum.

Government Support and Market Dynamics
Birla acknowledged the support of the government’s telecom reforms in enabling Vodafone Idea to reach this milestone. He emphasized the importance of maintaining a competitive market with three private telecom players, referring to Vodafone Idea as a “national asset” that serves millions of people across the country.

Financial Stability and Investor Confidence
Despite the challenges faced by Vodafone Idea, Birla expressed confidence in the company’s financial health, noting its low overall debt of Rs 4,000 crore. He also highlighted the substantial investments made by Vodafone and the Aditya Birla Group in the company, totaling over Rs 1.70 lakh crore, demonstrating a long-term commitment to its growth.

Bankers’ Confidence and Investor Response
SBI Chairman Dinesh Kumar Khara, speaking at the same event, praised Birla for his leadership and credited him for instilling trust and confidence among bankers and investors. Khara reiterated the need for three private telecom players in the country and commended Birla for his personal investment and the global investor response to the fundraise.

Positive Market Response and Future Outlook
The successful fundraise, oversubscribed by nearly 7 times, reflects strong investor confidence in Vodafone Idea’s future prospects. The retail portion of the follow-on public offer also received full subscriptions, indicating widespread investor interest in the company’s turnaround strategy. Vodafone Idea’s stock closed 5.27% higher at Rs 13.78 on the BSE, reflecting the positive market sentiment towards the company’s strategic initiatives.

Kumar Mangalam Birla’s optimistic outlook, backed by strong investor support and strategic investments, suggests a promising future for Vodafone Idea as it embarks on its next phase of growth. The successful fundraise is expected to provide the necessary financial impetus for Vodafone Idea to enhance its network infrastructure and introduce innovative services, positioning it for sustainable growth in the competitive telecom market.

(With inputs from PTI)