Vodafone Idea’s funding efforts are closely associated with the election results. Recently, VI raised around 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 loans, but it is gaining clarity on investors and lenders whether the government will convert a part of VI’s dues into equity. This conversion has occurred earlier, the government has converted the VI’s interest arrears on deferred payments, making it the biggest stake in the company.
VI’s management has indicated that they may give more equity to the government in exchange for reducing their legal arrears and seeking relief. Additionally, VI has contacted the Supreme Court (SC) to address the alleged example of the Department of Telecommunications (DOT) along with the adjusted gross revenue (AGR) arrears. A favourable decision from SC can provide significant relief for the company and its investors.
Banks and investors are investigating VI’s future plans. While VI is likely to obtain healthy returns in the coming years, success will require careful planning and efficient execution. The company has demonstrated its ability to pay timely to banks and lenders, which reduces its bank dues in the last one year, which increases its credibility. Although banks are cautious about further exposure to VI, especially Telco as Telco struggles to maintain its customer base between rigorous competition.
