Aditya Birla Group looking to raise funds for Vi at promoter level: Report

The group is reportedly looking to raise long-term debt for ailing telco Vodafone Idea (Vi) and use preferential share allotment as the route

Aditya Birla Group is in discussions with banks to raise funds at a promoter level for an equity infusion into Vodafone Idea (Vi), a report in the Economic Times (ET) said. The group is reportedly looking to raise long-term debt and use preferential share allotment as its route. 

This comes after the Centre agreed to convert dues worth Rs 16,133 crore into equity. 

"But it is likely it will liquidate its remaining stake of 21.05 per cent in Indus Towers and use the funds to invest...Alongside, efforts are also underway to rope in a third long-term investor," a person aware of the matter told ET. 

A senior banker told ET that the group has raised money in the same way earlier too. It was used to increase liquidity in the company. After the equity conversion, the Centre's stake in Vi is 33.1 per cent. Aditya Birla Group and Vodafone own 32 per cent and 18 per cent, respectively.

The telco has been struggling to raise money and improve its operational efficiency. As on December 31, the company's gross debt was Rs 2.23 trillion. At the same time, as on March 2022, its net worth was Rs 61,965 crore. 

Reports have also stated that the company is looking to refinance Rs 3,000-4,000 crore worth of loans and is in talks with Indian banks for the same. 

Its losses, however, have widened. On Tuesday the telco reported a rise in its consolidated loss to Rs 7,990 crore for the third quarter that ended December 31, 2022. It had registered a loss of Rs 7,234.1 crore in the same period a year ago.

VIL's average revenue per user, a key performance indicator of telecom operators, improved by 17.4 per cent on a year-over-year basis to Rs 135 during the Q3FY23, aided by tariff hikes and migration of subscribers to unlimited tariff plans.

The overall subscriber base of the company declined to 22.86 crores during the reported Q3FY23 from 23.44 crore in Q2FY23.