Less than a month after UK-headquartered Vodafone Group Plc clarified it had no plans to infuse fresh capital into cash-strapped Vodafone Idea (Vi), reports suggest that Aditya Birla Group chairman Kumar Mangalam Birla might put some capital into the telco.
According to a Moneycontrol report, Birla is expected to infuse a token amount of less than Rs 1,000 crore in the company as a show of confidence.
Birla may sell a part of his stake in Vi to Indus Towers, a company involved in providing infrastructure services to telecom operators, according to an Economic Times report quoting sources.
The money from this sale of shares is likely to be put into the loss-making telecom company. This will also be followed by external funding, the report said.
The ET report, citing a senior official close to the Vodafone Group, said that Birla is planning to put in some money and the significant sum will have to come from "external sources". The official said that the lion's share of the fresh investment into Vi will come from "monetising the assets" in Vodafone Group-backed Indus Towers.
The official reiterated that the Vodafone Group is unlikely to put in any money into the debt-ridden telecom.
The talks of capital infusion come more than a month after the Centre approved a four-year moratorium on adjusted gross revenue (AGR) and spectrum payouts, which is estimated to give Vi a shade over Rs 1 lakh crore in potential cash flow relief.
According to reports, Vi’s lenders are also pushing its promoters to put in funds into the telco in anticipation that the move will prompt other investors to pump in capital. Fund infusion is critical for the growth and survival of Vodafone Idea.
While Vodafone Group Plc owns 44.39 percent of Vodafone Idea, Aditya Birla Group holds a 27.66 percent stake.