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VIL promoters to infuse INR45b in equity; on expected lines to clear Indus Towers’ dues
VIL announced INR45b equity infusion by promoters; Further plans to explore QIP/private placement of INR100b
* VIL announced an equity infusion of INR45b by its promoters – Vodafone and the Aditya Birla group – at INR13.3/share (20% premium to its CMP), implying a dilution of 11% (excluding the dilution due to the government moratorium). It also plans to undertake an INR100b QIP/private placement and will seek shareholder approval for the same at its EGM on 26th Mar’22.
* Vodafone using Indus Towers’ stake proceeds to infuse equity; fresh equity infusion by the Aditya Birla group (ABG):
Out of the total INR45b, INR33.75b will be infused by Vodafone, raising its stake to 48% from 44%, while ABG will infuse INR11.25b, diluting its stake to 27% from 28%. Vodafone sold 7.3% stake (at an estimated value of INR40b), of which 4.7% was acquired by Bharti. Thus, Vodafone has used its stake in Indus Towers to infuse equity. On the other hand, ABG will infuse fresh equity.
* The move is on expected lines as VIL could use the proceeds to clear its payables to Indus Tower along with some NCD repayments.
* VIL plans to undertake an INR100b QIP/private placement in one or two tranches. The company, however, did not mention any details of the potential investors.
* Near term repayments fulfilled, needs cash for capex:
VIL had NCD repayments of INR64b due between Dec’21 and Feb’22, which has mostly been met. Its next repayment is due only in Sep’23. The company has an annualized EBITDA of INR65b (3QFY22), which is sufficient to undergo maintenance capex. However, the same remains 25% lower than that for Bharti/RJio, despite their higher scale/capacity. Further arrest of market share loss, which continued until 3QFY22, remains key.This is evident from Bharti’s recently announced acquisition of Vodafone’s 4.7% stake in Indus Tower, with a pre-condition that the amount paid be infused as fresh equity by Vodafone in VIL and the latter, in turn, clears its outstanding dues with Indus Towers.
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