NEW DELHI: With Vodafone Idea infusing Rs 20,000 crore via follow-on public offering and equity contribution by one of the promoter entity, Aditya Birla Group, the government is now exploring whether sovereign wealth funds would be interested in picking up its stake in the company.
Sources said that since the promoter group has shown sufficient interest in raising funds and running the company, and government fully backing the efforts, it makes sense for sovereign wealth funds to acquire government’s current 23.15% stake in the company.
Abu Dhabi Investment Authority, Qatar Investment Authority, Singapore’s Temasek, are some of the funds which have been sounded out, sources said, adding that the efforts are at a very initial stage.
“Since the government and the company have displayed more than sufficient intent that Vodafone Idea is a long-term telecom player and the country will have three strong player in the sector, investment by such funds will be profitable,” sources said.
The funds have been assured that post the current moratorium, which ends in September 2025, the government will extend all possible help – like further deferral of payments like adjusted gross revenue dues – so that the company’s business case becomes viable. This assurance is significant because once the moratorium on payment of AGR and spectrum dues ends in September 2025, the company will need to pay Rs 29,100 crore by the end of March 2026 to the government and Rs 43,000 crore annually from FY27 onwards till FY31.
Vodafone Idea has started showing signs of revival after the recent fund raise exercise. For instance, it has paid dues worth Rs 1,500 crore, comprising revenue share licence fee and spectrum usage charges, to the department of telecommunications (DoT).
This includes, around Rs 720 crore which were pending for the January-March quarter, while the balance is the full payment for the April-June period. These are concurrent dues, which are not covered by the four-year moratorium. This is for the first time in recent years, that the company has paid the statutory quarterly bills raised by DoT in full and on time.
The company has also paid the first installment of Rs 346 crore for the spectrum acquired in the June auctions. Besides, it has also started clearing past dues of vendors such as Indus Towers.
At the end of the March quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) stood at 2.16 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.3 trillion, adjusted gross revenue (AGR) liabilities of Rs 70,320 crore that are due to the government, debt from banks and financial institutions of Rs 4,212 crore and optionally convertible debentures amounting to Rs 160 crore.
The company is also engaged with a consortium of banks for debt funding of about Rs 25,000 crore and additional non-fund-based facilities of up to Rs 10,000 crore.
Further, the company’s liability may get reduced by up to 50% in case of a positive verdict on the AGR dues case. Last month, the Supreme Court agreed to hear a curative petition by Vodafone Idea seeking correction of alleged errors in AGR.
Vodafone Idea has also recently reached out to DoT seeking waiver on financial bank guarantee worth Rs 25,000 crore that is required to be submitted for spectrum payment due in September 2025. The payment is for spectrum purchased before 2022 auctions.
The company’s net loss for the January-March quarter expanded to Rs 7,674 crore from Rs 6,986 crore in the preceding quarter. The losses expanded owing to fall in revenues and base effect of the preceding quarter where it recorded a one-time gain of Rs 755.5 crore.
Revenue from operations during the period fell 0.6% q-o-q to Rs 10,607 crore. On a year-on-year basis, the revenue rose 0.7%.The company lost 2.6 million mobile subscribers, taking its user base to 212.6 million at the end of March.
Source: The Financial Express
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