New Delhi, Feb. 28 -- Amid heightened competition in the telecom sector, raising funds is crucial for Vodafone Idea Ltd's (VIL's) survival. However, investors were visibly disappointed after the company announced that the board of directors had approved a fundraise of up to Rs.20,000 crore through equity or equity-linked instruments, causing VIL's shares to plunge almost 14% on Wednesday. What gives?

One of the company's promoters will participate in the proposed fundraise and is likely to invest about Rs.2,000 crore. This means that 90% of the funding will have to come from external investors, on which there is insufficient clarity at the moment. Sure, the fundraise was on the cards, and investors seemed to have factored that in, going ...