The board of Vodafone Idea (Vi) on Thursday approved a fund raising programme of Rs 14,500 crore of which Rs 4,500 crore will come from its promoters as the telco turned its attention towards strengthening operations after receiving a bailout from the Centre last year.

This much awaited fund raising will enable the carrier to beef up its infrastructure even as it has been consistently witnessing subscriber migration amid losses and a pile of debt.

In a regulatory filing to the stock exchanges post market hours, the joint venture between the Aditya Birla group and Vodafone group plc said that it will issue up to 3,38,34,58,645 equity shares at price of Rs 13.30 per share which is at a 10 per cent premium to the floor price of Rs 12.08 as per SEBI (ICDR) Regulations, for an aggregate consideration of up to Rs 4,500 crore to two Vodafone group entities-Euro Pacific Securities Ltd and Prime Metals Ltd, and Oriana Investments Pte. Ltd (Aditya Birla Group firm) on a preferential basis.

The company added that it will also issue ``equity shares or securities convertible into equity shares, global Depository Receipts, American Depository Receipts, foreign currency convertible bonds, convertible debentures, warrants, composite issue of non-convertible debentures and warrants entitling the warrant holder to apply for equity shares or a combination thereof up to an aggregate amount of Rs 10,000 crore by way of private placement, qualified institutional placement or through any other permissible mode in one or more tranches’’. Vi will hold an extraordinary general meeting on March 26 to seek shareholders nod for the proposal. Ahead of the announcement, shares of the company rallied by 6.13 per cent to close at Rs 11.08 in the BSE.

The company had posted a consolidated loss of Rs 7231 crore for the third quarter ended December 31, 2021 as against a loss of Rs 7132 crore on a sequential basis, on revenues of Rs 9715 crore as compared to Rs 9402 crore in the same period.

Its total gross debt as of December 31, 2021 stood at Rs 1,98,980 crore, that included deferred spectrum payment obligations and adjusted gross revenues (AGR) liability due to the Government. It also comprised debt from banks and financial institutions of Rs 23,060 crore. On the other hand, its cash & cash equivalents stood at Rs 1,500 crore, leading to a net debt of Rs 197480 crore.

However, in January, the carrier had decided to exercise the option of converting the interest on spectrum instalments and AGR dues into equity following which the Centre will hold around 35.8 per cent of in the company.

Last year, the Central Government had announced a mega rescue package for the telecom sector, including a four-year moratorium on dues arising from a Supreme Court verdict on AGR liabilities and the payment of spectrum instalments. The second major part of the package was the option to convert the interest component on the dues into equity, and operators were given time till January 12, 2022 to make the decision.

While the cash infusion will come as a relief to the company, observers said that its problems are still far from over as it will have to focus on trimming debt, retain the 4G subscriber base and also raise the average revenue per user (ARPU) through tariff hikes to stay afloat in the long-run. Its ARPU had improved in the period ended December 31, 2021 to Rs 115 from Rs 109 in the July-September period.