Buoyed by Govt bundle, Vodafone Idea eyes fund infusion of Rs 20,000 crore

DEBT-LADEN Vi (Vodafone Idea) might get a fund infusion of as much as Rs 20,000 crore over the subsequent fortnight, of which Rs 7,000-Rs 8,000 crore is prone to come from promoters and the remainder partially from financial institution ensures returned to the telco as a part of the current Government bundle, The Indian Express has learnt.
The firm might go for a recent spherical of fund infusion from buyers solely after a marginal enchancment in its common income per consumer (ARPU), sources mentioned.
The telecom service supplier’s ARPU within the April-June quarter stood at Rs 104 per consumer. Telecom firms within the nation have been pushing for a flooring worth on tariffs to make sure their ARPU reaches at the least Rs 200 which, they are saying, is an optimum determine.
Vi has been making an attempt to boost as much as Rs 25,000 crore or usher in a strategic accomplice to steer the corporate out of the woods. Industrialist Kumar Mangalam Birla, who lately stepped down because the chairman of Vi, and Vodafone Group Plc collectively maintain near 70 per cent stake within the firm.
The firm didn’t reply to queries from The Indian Express looking for touch upon fundraising and the timeline.
The firm’s MD Ravinder Takkar, nevertheless, had earlier mentioned that there was renewed curiosity from buyers following the reforms introduced by the Department of Telecommunications (DoT).
“For us, it (telecom package) opens the door for new investments. We have been in the process of fundraising for a while. There were concerns with respect to the investments in India and in the telecom sector even though they liked the sector and they liked the country. Those fears have now been removed. We think there is an opportunity for additional fund raising,” Takkar had advised The Indian Express throughout an interplay in September.

In the bundle introduced in September, the DoT had lower down on the requirement of financial institution ensures, and finished away with their want in future auctions. A moratorium of 4 years on fee of spectrum bought in previous auctions, barring the public sale of 2021, and adjusted gross income (AGR), was additionally provided.

ExplainedFunds key for ViVi’s money owed exceed Rs 2 lakh crore at current. And the corporate’s survival, and certainly that of a three-player telecom market, hinges on the funds will probably be in a position to increase over the subsequent 18 months.

Companies that avail of the four-year moratorium, both on fee of AGR dues or on dues of the spectrum that they had bought in previous auctions, must pay curiosity which shall be calculated from October 1 this yr.
Before the reforms bundle was introduced in September, Vi had been asking for an help bundle from the Government, particularly after the Supreme Court’s verdict in October 2019 on the AGR concern. At the time, Vodafone Idea’s dues have been Rs 58,254 crore whereas Bharti Airtel’s dues have been Rs 43,980 crore.
Two months later, Kumar Mangalam Birla had mentioned that the corporate must “shut shop” if no aid was forthcoming from the Government.

In its last ruling on September 1, 2020, the Supreme Court had directed telecom firms to pay AGR, curiosity and penalty on non-payment on AGR dues, and curiosity on penalty for non-payment of AGR dues in yearly instalments, inside a interval of 10 years beginning April 1, 2021.
Since then, Vi had repeatedly requested the Government to offer some type of help, both via moratorium in fee of dues or setting a flooring worth on telecom tariffs.
In June this yr, Birla had written to the Central authorities, providing to “hand over” his 27 per cent stake within the firm, to any public sector, authorities or home monetary entity or to another agency that the Government might imagine match, to maintain Vi going.