Uday Kotak, the renowned billionaire banker, recently made headlines in India’s corporate circles by indirectly criticizing Vodafone Idea’s latest strategy of raising funds by issuing shares. Without explicitly naming the telecom giant or its key figures, Kotak slyly commented on VI’s move to raise Rs 2,458 crore through share issuance to pay off part of its outstanding dues. In a social media post on X (formerly Twitter), Kotak suggested that issuing equity to creditors as a debt repayment method was a common practice for companies facing financial difficulties. He highlighted the concept of creditors selling well-traded stocks in the market to recover their dues, prompting a discussion on financial strategies in tough times. This subtle jab from Kotak comes amidst Vodafone Idea’s consistent efforts to manage its staggering debt burden. VI recently announced its intention to convert government debts into equity, further diluting shareholders’ stakes. In a bid to stabilize its financial position, the telecom company has raised substantial equity and is actively seeking debt funding from lenders. Additionally, VI plans to issue 166 crore shares to Nokia Solutions Ltd. and Ericsson India Ltd. on a preferential basis, highlighting strategic alliances with its network equipment suppliers. Through these financial maneuvers, Vodafone Idea aims to address its payment obligations, including significant liabilities to the government and reduced debts from banks and financial institutions. Kotak’s subtle criticism sheds light on the complex financial landscape faced by companies like Vodafone Idea, navigating challenges while seeking sustainable solutions.
