Birla says Rs 25k crore issue to give Vodafone Idea funds for 3-4 years

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MUMBAI: Vodafone Idea will have enough capital after the completion of the forthcoming Rs 25,000-crore rights issue and will not need to raise equity for the next three or four years, chairman Kumar Mangalam Birla has said.In an exclusive interview with ET on issues ranging from Vodafone Idea, the problems of the telecom sector and prospects of other Aditya Birla Group companies, Birla said the telecom company intends to be a pure-play mobility firm unlike rival Reliance Jio Infocomm, which has branched out to become a broadband and content provider.He denied the telco was underinvested, and asserted that both the promoters — AB Group and Vodafone Plc — were committed to investing funds. Birla, however, acknowledged that there were concerns in the market on whether the Rs 25,000-crore investment will be enough to help the telco survive the disruptive price war in the sector.“It is not an entity to be scoffed at,” Birla said about Voda Idea. “Will it withstand Jio is a different question, but the fact that it is underinvested is not true because together the investment has been substantial.”Birla declared his intention to focus on consolidating the gains of the past few years in cement and non-ferrous metals, especially after the acquisition of the cement businesses of Jaypee Group and Century.He said the focus of the financial services business is on quality assets, not just blind growth.Birla expressed happiness at the turnaround in the group’s life insurance business and the fact that the financial services division has been able to raise money and protect its balance sheet.He lauded the government for the insolvency and bankruptcy legislation, which he said is a deep reform. “Who would have thought even three or five years ago that a promoter could actually lose his assets… I think a lot of promoters treated debt as equity and did not find the need to actually repay within a specified period,” he said.The AB Group chief called for import duty protection for aluminium and reworking of the free trade agreements signed under the previous regime.Birla said the government wants to be seen as a responsible global citizen. “For example, I don’t think they want to be seen as being adversarial to China in any way at all, which is perhaps an important part of the reason behind not protecting domestic industries from China. But it’s not about protecting, it’s providing a level playing field. So, the government’s general view is that it needs to be reviewed when it comes up for revision, and one hopes at that time an objective view will prevail.”