VODAFONE Idea has made a requisite payment of Rs 1,701 crore to the Department of Telecommunications telecom department towards 2022 Spectrum Auction Instalment. In a regulatory filing, Vodafone Idea said the payment is in accordance with the terms of Notice Inviting Applications dated June 15, 2022. In an earlier filing on August 14, Vodafone Idea had said that the company has received a communication from a promoter group entity confirming that in the event of any fund requirement for meeting its impending payment obligations by the Company, it shall provide direct or indirect financial support to the extent of Rs. 2,000 crore.

 

On August 24, CARE Ratings revised the outlook assigned to the long-term bank facilities and instruments of Vodafone Idea Limited (VIL) from‘Positive’ to ‘Stable’ acknowledging delay in fund raising from investors and financialinstitutionsagainst the envisaged timelines, while the ratings have been reaffirmed.

 

The ratings factor in the experienced management team, pan-India telecom presence with high brand recognition supported by a stable outlook forthe Indian telecommunications industry, stance of the promoter groups [i.e., the Aditya Birla group (ABG) and the Vodafone group Plc(VGP)]in assisting the entity and majority shareholding (33.14% as on June 30, 2023) of the Government of India through the Department of Investment and PublicAsset Management. Furthermore, the ratings takecognisanceofthereceipt of commitment from a promoter group entity confirming direct or indirect financial support to the extent of Rs 2,000 crore to address impendingobligationsofthe company arising out of any cash flow mismatch. The ratings, however, remain underpinned by VIL’s deteriorated financial risk profile, wherein, the tangiblenet-worthhas eroded,its constantly declining subscriber base and delayin raising funds - both debt and equity, thereby dampening its efforts to gain market share through expansion of 4G services and timely rollout of 5G services.