Vodafone Idea’s fundraising efforts are closely tied to the outcome of the elections. Recently, Vi raised approximately Rs 20,000 crore through a follow-on public offer (FPO) and a promoter entity. The company plans to secure an additional Rs 35,000 crore through debt, but this is contingent on investors and lenders gaining clarity on whether the government will convert a portion of Vi’s dues into equity. This conversion has occurred before, with the government converting Vi’s interest dues on deferred payments, making it the largest stakeholder in the company.
Vi’s management has indicated that they may seek further relief by offering more equity to the government in exchange for reducing their statutory dues. Additionally, Vi has approached the Supreme Court (SC) to address the Department of Telecommunications’ (DoT) alleged miscalculation of adjusted gross revenue (AGR) dues. A favorable ruling from the SC could provide significant relief for the company and its investors.
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View of Government Stake in VI
Banks and investors are scrutinizing Vi’s future plans. While there is potential for Vi to achieve healthy returns in the coming years, success will require meticulous planning and efficient execution. The company has demonstrated its ability to make timely payments to banks and lenders, significantly reducing its bank dues over the past year, which enhances its credibility.
However, banks remain cautious about further exposure to Vi, particularly as the telco struggles to retain its customer base amidst stiff competition.
