Vodafone Idea in Talks with Amazon

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Vodafone Idea in Talks with Amazon
31 May 2022
6 min read

News Synopsis

American retail giant Amazon and a group of investors have negotiated with Aditya Birla Group to invest up to Rs 20,000 crore in the mobile operator Vodafone Idea.

Banking sources state that the proceeds from the sale will be used to bid on the upcoming 5G spectrum auction and invest in rolling out the service by the end of the year. Apart from Amazon, the group is in talks with private equity investors seeking to gain exposure to India's telecommunications sector. Vodafone Idea's share price fell 4.14% at Rs 9.3 per share, with a valuation of Rs 29,870 crore on Monday.

In March of this year, the Ministry of Telecommunications ordered the company to return the financial bank's guarantees associated with the previous spectrum auction. To date, bank guarantees worth Rs 16,000 crore have been returned, providing financial support to the company.

After the priority issue, promoter combined shareholding is 74.99%. After converting interest into shares, the government's stake is expected to be 33%.

The company is keen to invest in services based on 5G technology after successful testing in Pune and Gandhinagar. Following the 5G price talks, the Telecommunications Regulatory Authority of India (Trai) has considered some demands from the industry, and prices in the 5G spectrum have fallen 36% from initial estimates.

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