Vodafone plans to invest an additional USD 120 million into India(Vi)

Vi shareholders Vodafone and Aditya Birla group are responsible for paying half of an infusion of 140 billion rupees (USD 1.7 billion) in equity as part of a turnaround strategy for the struggling carrier.

Vodafone Idea would receive an equity investment of roughly USD 1.7 billion, with some of the money coming from its UK parent, according to reports.

According to the Economic Times, which cited anonymous sources familiar with discussions regarding the telco's financial future, Vi shareholders Vodafone and Aditya Birla group are responsible for paying half of an infusion of 140 billion rupees (USD 1.7 billion) in equity as part of a turnaround strategy for the struggling carrier.

In accordance with the business plan submitted to the state earlier this month, the parent companies have already invested INR50 billion in new equity since the government's telecom revival package offered in September 2021. This leaves them with INR 20 billion, or, assuming a 50:50 share, nearly 120 million in USD each.

The analysis supports a recent assertion made by Vodafone Group that the Indian business requires further financial assistance. In particular, Vi "remains in need of additional liquidity support from its lenders and intends to raise additional funding," Vodafone noted in its most recent full-year financial statement, which was released last month.

Vi lost 1.2 million mobile subscribers in March alone, based on the most recent information from the Telecom Regulatory Authority of India (TRAI), leaving it with a market share of less than 21%. When Vodafone India combined with Idea Cellular in August 2018, the resulting company (Vi) had roughly 38% of the market, it could appear like a sizable portion of the industry.

It's a boost Vi desperately needs, as shown by the fact that the company's shares increased as the news came out. Issues with the balance sheet, government fees, and a declining client base are just a few of its well-documented problems.

Along with its financial problems, Vi is also grappling with the consequences of failing to introduce 5G services at a time when key competitors Bharti Airtel and Reliance Jio are already rolling out their 5G services and have spread in over 3500 cities nationwide. State-owned BSNL is also on the verge to launch 4G and 5G services after the government recently approved its third revival plan, totaling approximately USD11 billion, adding further pressure to Vi.