Vodafone Idea okays Rs 25,000 crore fund raising

Vodafone Idea on Friday has approved mobilising of up to Rs 25,000 crore.
Vodafone telecom tower
Vodafone Idea will use fresh funds for making payment towards Adjusted Gross Revenue (AGR) dues and network expansion. The third largest telecom operator in India did not specify what route it will take to raise the additional funds.

Supreme Court had directed all telecom operators to pay 10 percent of total adjusted gross revenue (AGR) dues this year, and rest of the payments in 10 instalments, starting from next fiscal year.

Vodafone Idea has balance dues of Rs 50,400 crore which it needs to pay over the next 10 years as per the SC’s directive.

The loss making Vodafone Idea would need to pay Rs 5,040 crore upfront payment by March 2021 and thereafter its yearly payment, according to estimates by Jefferies, would be around Rs 6,800 crore per year.

Further, from FY23, Vodafone Idea would have to start making payment towards its deferred spectrum instalments of around Rs 16,000 crore annually. The government has provided telecom operators moratorium on payment of deferred spectrum installments for FY21 and FY22.

Vodafone Idea’s cash and cash equivalents stand at Rs 3,450 crore while its net debt was at Rs 1.16 lakh crore as on June 30, 2020.

The company had posted Rs 25,467 crore loss during the April-June quarter, mainly due to provisioning for AGR dues.

Vodafone Idea has lost 11.3 million subscribers during the April-June quarter to 279.8 million. Vodafone Idea lost 1 million 4G subscribers. Vodafone Idea’s 4G subscriber base reached 104.6 million. Vodafone Idea’s total data subscribers declined by 3.8 million to 135.7 million.