Vi Might Raise $3 Billion From Apollo Global Management

Vodafone-Idea is again planning to raise funds to clear its spectrum dues. The telecom operator is reportedly in talks with US PE group Apollo Global Management to raise $3 billion (Rs. 22,400 crores) in the coming months. The discussion of funding with Apollo is likely to cover the structure of the deal and funding terms.

Why This Deal Is Important For Vodafone-Idea

Notably, this deal is quite important for the telecom operator and it is very keen to get this funding from Apollo Global, unlike its other deals. The telecom operator is ready to provide a sizeable stake after completing the agreement on terms and valuation.

Currently, Vodafone Group has a 44.39 percent stake in the entire firm, whereas Aditya Birla Group holds only 27.66 percent share in the joint entity.

"Abundant global liquidity and high investor risk appetite offer an opportunity to companies facing short-term stress to raise capital with stricter safeguards and covenants that protect investors," Hemant Mishr, founder of SCUBE Capital, a Singapore-based fund was quoted by ET.

India's third-largest telecom operator Vodafone-Idea is under deep crisis due to adjusted gross revenue and spectrum payment. The telecom operator is looking for an extension of the timeline to clear dues.

Vodafone-Idea Needs Rs. 70,000 Crores Funding To Sustain

Meanwhile, analysts believe that the telecom operator required Rs. 70,000 crores funding to run its operations in the country.

"Vi will need to raise around Rs. 70,000 crore in equity or increase its average revenue per user (ARPU) to around Rs 200 to get out of the woods, or some combination of the two," brokerage Deutsche Bank said in a report.

The brokerage firm believes that the Department of Telecommunication will take some steps to help the telecom operator. Notably, the telecom operator is trying hard to raise money for its operations.

Vi is the only telecom private operator that is facing financial issues as Airtel and Reliance Jio are doing good and attracting users to their platforms.

The telecom operator is taking several steps, but somehow lacking in increasing revenue and clearing its dues, which is why we believe that DoT will take some steps to help the telecom operator.