Vi plans another Rs20,000 cr fundraise, remains hopeful of government support
Vodafone Idea Ltd's board approved raising another ₹ 20,000 crore through a further public offering (FPO), private placement, or other permissible mode to stay afloat, it said in an exchange filing on 30 May after reporting losses for another quarter amid never-ending financial troubles.
India's third-largest telecom operator said it was confident of gaining government support, successfully arranging funding, and generating cash flow from operations, and announced that a Capital Raising Committee will evaluate and decide on the potential route of fundraising.
The debt-laden company declared its March quarter results days after pleading before the Supreme Court for a waiver of massive government dues as banks refused it further loans. The court had rejected the plea.
In the petition, the telco had said it would not be able to operate beyond the current fiscal year without bank funding, which remains elusive as lenders remain wary of its dues worth ₹ 84,000 crore linked to adjusted gross revenue (AGR).
Before approaching the court, the company had submitted a similar representation to the government, seeking a waiver of interest, penalty, and interest on penalty on its AGR dues, which was not entertained.
'In the company's view, this dismissal does not preclude it from further engaging with the Government of India based on its foreseeable cash flows for arriving at an appropriate solution on the AGR matter before the next instalment date,' the telecom operator said in its financial statement.
However, a government four-year moratorium on payments of AGR and spectrum dues for telecom companies, including Vodafone Idea, ends in September, making it even more difficult for the company.
In the absence of any relief, starting 31 March 2026, it must pay an annual instalment of over ₹ 18,000 crore for the next six years towards AGR and spectrum dues to the government. In 2025-26 itself, it will have to pay ₹ 16,428 crore towards AGR dues and ₹ 2,539 crore towards deferred spectrum dues.
Vodafone Idea said amounts pertaining to some of the years are subject to correction/revision due to the disposal of representations and any other outcome of litigation. The amounts will be finally determined by 31 December 2025 and are payable in six equal instalments after the moratorium period starts from 31 March 2026.
But first, it desperately needs an operational turnaround.
In line with the Street estimates, its net loss for the fourth quarter of 2024-25 widened sequentially to ₹ 7,166 crore from ₹ 6,609 crore. The same was ₹ 7,675 crore a year ago.
The sequential rise in losses can be attributed to an increase in expenses, especially finance costs, which include interest payments on debt and other liabilities. Finance costs, accounting for 59% of its revenue from operations, rose 9% quarter-on-quarter and 3% year-on-year to ₹ 6,471 crore.
An average of six brokerage firms' estimates had pegged losses at ₹ 7,162.5 crore.
Its revenue from operations rose 4% on-year to ₹ 11,014 crore, in line with estimates, owing to improvement in its subscriber mix and an increase in postpaid users. The revenue, however, was down nearly 1% sequentially owing to continuous subscriber loss, largely in the lower-end segment.
'This has been a turnaround quarter for us, marked by the highest average daily revenue in the past five years and a significant reduction in subscriber loss,' said Akshaya Moondra, chief executive of Vodafone Idea.
'Early indicators show improvement across key business metrics and with our ongoing investments, we are well placed to effectively participate in the growth opportunity offered by the Industry,' Moondra said, adding that the company remains engaged with lenders to secure debt financing to support our broader capex plans of ₹ 50,000–55,000 crore.
Owing to a rise in revenue on a year-on-year basis, Vodafone Idea's earnings before interest, taxes, depreciation, and amortisation (Ebitda) rose 7.5% to ₹ 4,660 crore. On a quarterly basis, Ebitda fell 1.1% due to an increase in expenses and a decline in revenue from operations.
Vodafone Idea declared its results late Friday night, after the bourses closed. Its shares closed 3.2% lower at ₹ 6.92 on BSE.
Even as Vodafone Idea has been losing subscribers for a long time now, the company's subscriber churn rate has slowed down during the March quarter. Compared to the loss of 5 million subscribers each in the September and December quarters, its subscriber churn slowed down to 1.6 million in the fourth quarter.
As of 31 March, it had 198.2 million mobile subscribers. Sequentially, its blended subscriber churn fell to 4.1% from 4.5%.
The company's 4G/5G subscribers rose to 126.4 million from 126 million in the quarter-ago period. The company's postpaid subscribers were 25.6 million, up from 25.2 million in the preceding quarter and 23.9 million in the year-ago period.
The telco has been improving its 4G services with network upgrades and has also started rolling out 5G, with Mumbai, Chandigarh, and Patna being the first circles. On 15 May, it launched 5G in Delhi and said it was targeting to expand the services in all 17 circles by August 2025.
However, analysts at BofA Securities said in a 7 April note that VIL (Vodafone Idea) was still some point away from showing positive net adds.
Its average revenue per user (Arpu), a key performance metric, rose marginally to ₹ 164 from ₹ 163 in the preceding quarter, in line with estimates.
Two fewer days during the March quarter caused a largely flat Arpu, offsetting the company's improved subscriber mix. Further, the impact of the July tariff hikes also ebbed.
In comparison, Airtel's India Arpu was flat at ₹ 245 in the quarter, whereas Reliance Jio's Arpu rose to ₹ 206.2 from ₹ 203.3 in the December quarter.
Vodafone Idea has been grappling with huge dues. As of 31 March, its total government dues stood at around ₹ 2 trillion, including ₹ 1.19 trillion in spectrum dues and ₹ 83,400 crore AGR dues.
Its outstanding debt from banks (including interest accrued but not due) was ₹ 2,345 crore. In March, the government offered another reprieve to the company by converting an additional ₹ 36,950 crore worth of statutory dues into equity. This was the second dues conversion that took the government's stake in Vodafone Idea to 49%.
On 2 June, at the earnings call, analysts and investors will closely watch for the company's commentary on the AGR dues, any clarity from the government on possible relief, fundraising prospects, the company's sustainability post-2025-26, and future tariff hikes.
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Time of India
an hour ago
- Time of India
Incremental positives in Vodafone Idea, but funding hinges on AGR clarity: Balaji Subramanian
"We will have to see what all steps the government can take without incurring the wrath of the Supreme Court . So, my sense is that one option can be to extend the timeline of the AGR payments , the other one could be slightly more difficult option but that could mean providing some relief especially on the interest and the penalty part of the AGR liability," says Balaji Subramanian, IIFL Capital . This quarter you have got Vodafone delivering its highest average daily revenues in the past five years. How do you see this performance Vodafone Idea and do you sense by any which way that it could be on the turnaround path? Balaji Subramanian: So, there were a number of positive things to take away from Vodafone's results. So, one was as you rightly said their daily revenue run rate was the highest in a long time. Their aprus were also higher. The subscriber losses have persisted, but the good thing is that at least they are lower than where they used to be. The capex has gone up which is a positive because the rollouts are critical as far as stemming their subscriber losses are concerned. So, there have been a few positives, but these are all incremental positives. What we really need is any relief on the AGR front because that is where the cash flow burden can meaningfully come off and that is what would lend comfort to banks when they decide whether to lend or not. So, on that count a couple of weeks back while the Supreme Court turned down the writ plea of Bharti and Vodafone Idea, the good thing there was that the court also made an observation that should the government go ahead and come out with any relief measures the court will not come in the way, so to that extent it is a positive. We will have to see what all steps the government can take without incurring the wrath of the Supreme Court. So, my sense is that one option can be to extend the timeline of the AGR payments, the other one could be slightly more difficult option but that could mean providing some relief especially on the interest and the penalty part of the AGR liability. So, now the ball is in the government's court and based on how the progress happens on any relief on AGR, that is when the fundraising angle will start probably kicking in. Live Events When Vodafone Idea raised capital about a year-and-a-half ago, it appeared that they finally will have enough and more money to take care of the debt and they would be able to come out of the hole which they had fallen in. But looks like they have not really managed to come out of it. So, for a minority shareholder irrespective of whether it is AGR or Starlink or the pricing power coming back to the industry, should a minority investor and a shareholder and our viewers who own Vodafone or plan to buy Vodafone should they avoid it? Balaji Subramanian: See, I have a cautious stance on the name. This is simply because of the fact that even with an AGR waiver the cash outgo will be fairly meaningful and if you look at what Vodafone Idea's turnaround plan was, the one which they had articulated when they raised funds a little over a year back, was that one, there will be tariff increases which played out, so they did their fundraise in April last year and the tariff hikes were announced towards the end of June, so that happened. The second thing was they said they will be able to successfully complete the equity part of the fundraising. There also they delivered. Where the problem has been was there was an expectation that the AGR dues also will see a meaningful reduction and as a result the debt raise which was also one of the planks of the turnaround strategy, that should also fall into place. But unfortunately, that part of the story has not played out and what we have seen is that even the ARPU increase or rather more precisely the revenue increase after the tariff hikes they have been a little bit underwhelming because there has been a fair bit of downtrading and churn that has happened, so that is where things have not exactly gone as per plan. So, if they manage to get some relief on the AGR burden and the debt funding falls in place, I definitely see a pop in the stock, but after that they will have to again start battling in the marketplace where things are not all that simple because we do have two strong competitors which are way ahead in terms of rollouts are concerned and their cash flow and balance sheet metrics are also quite strong. So, it will be an uphill task for Vodafone Idea even if they manage to get all these things in place. The other side is Bharti, stock is at an all-time high, data is stabilising, the capex in the short term does not look like there is a large number coming for some 6G or 7G or 9G or 10G at least that talk has not started. So, I am assuming that in the near-term capex would be manageable. But the real joker in the pack is going to be Starlink. It is coming to India. When will that start affecting Bharti's data business because Starlink will come at a price which would be attractive and a service which would be better. Balaji Subramanian: So, I do not really subscribe to what you stated on Starlink completely because if you look at Starlink a couple of weeks back they launched in Bangladesh where if you convert the pricing there into Indian rupees, you can see that their plan starts at around Rs 2900 per month or so. There are two plans. One is at around 2900, the other one is a little over Rs 4000 per month. And in India when it launches, we do not know whether this will be the pre-GST pricing. So, if we are going to have GST also on top, then we are looking at something like a Rs 3500 per month and let us not forget that unlike in certain pockets in the US where they offer the terminal also free of cost, here the terminal is also being charged. So, when I mentioned here, I refer to Bangladesh where the terminal costs around Rs 35,000. So, that means that it is going to be on the fairly expensive side. I do know that Starlink offers $10 plan in Kenya, but let us not forget that in Kenya the conventional fixed broadband plans start at around $20, that is not the case in India where you have the entry level plan of Jio the FTTH plan starts at Rs 399 plus GST. So, even with that we are looking at a Rs sub-500 number and compared to that Starlink is probably six to seven times priced higher. So, at least as things stand, Starlink will be largely restricted to either certain niche high-income population groups or it might be more relevant in areas where it is near impossible to have either a fixed line connectivity or even a 5G FWA connectivity.
Economic Times
an hour ago
- Economic Times
vodafone idea: Incremental positives in Vodafone Idea, but funding hinges on AGR clarity: Balaji Subramanian
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads "We will have to see what all steps the government can take without incurring the wrath of the Supreme Court . So, my sense is that one option can be to extend the timeline of the AGR payments , the other one could be slightly more difficult option but that could mean providing some relief especially on the interest and the penalty part of the AGR liability," says Balaji Subramanian, IIFL Capital So, there were a number of positive things to take away from Vodafone's results. So, one was as you rightly said their daily revenue run rate was the highest in a long time. Their aprus were also higher. The subscriber losses have persisted, but the good thing is that at least they are lower than where they used to be. The capex has gone up which is a positive because the rollouts are critical as far as stemming their subscriber losses are concerned. So, there have been a few positives, but these are all incremental positives. What we really need is any relief on the AGR front because that is where the cash flow burden can meaningfully come off and that is what would lend comfort to banks when they decide whether to lend or on that count a couple of weeks back while the Supreme Court turned down the writ plea of Bharti and Vodafone Idea, the good thing there was that the court also made an observation that should the government go ahead and come out with any relief measures the court will not come in the way, so to that extent it is a will have to see what all steps the government can take without incurring the wrath of the Supreme Court. So, my sense is that one option can be to extend the timeline of the AGR payments, the other one could be slightly more difficult option but that could mean providing some relief especially on the interest and the penalty part of the AGR liability. So, now the ball is in the government's court and based on how the progress happens on any relief on AGR, that is when the fundraising angle will start probably kicking I have a cautious stance on the name. This is simply because of the fact that even with an AGR waiver the cash outgo will be fairly meaningful and if you look at what Vodafone Idea's turnaround plan was, the one which they had articulated when they raised funds a little over a year back, was that one, there will be tariff increases which played out, so they did their fundraise in April last year and the tariff hikes were announced towards the end of June, so that happened. The second thing was they said they will be able to successfully complete the equity part of the fundraising. There also they the problem has been was there was an expectation that the AGR dues also will see a meaningful reduction and as a result the debt raise which was also one of the planks of the turnaround strategy, that should also fall into place. But unfortunately, that part of the story has not played out and what we have seen is that even the ARPU increase or rather more precisely the revenue increase after the tariff hikes they have been a little bit underwhelming because there has been a fair bit of downtrading and churn that has happened, so that is where things have not exactly gone as per if they manage to get some relief on the AGR burden and the debt funding falls in place, I definitely see a pop in the stock, but after that they will have to again start battling in the marketplace where things are not all that simple because we do have two strong competitors which are way ahead in terms of rollouts are concerned and their cash flow and balance sheet metrics are also quite strong. So, it will be an uphill task for Vodafone Idea even if they manage to get all these things in I do not really subscribe to what you stated on Starlink completely because if you look at Starlink a couple of weeks back they launched in Bangladesh where if you convert the pricing there into Indian rupees, you can see that their plan starts at around Rs 2900 per month or so. There are two plans. One is at around 2900, the other one is a little over Rs 4000 per month. And in India when it launches, we do not know whether this will be the pre-GST pricing. So, if we are going to have GST also on top, then we are looking at something like a Rs 3500 per month and let us not forget that unlike in certain pockets in the US where they offer the terminal also free of cost, here the terminal is also being when I mentioned here, I refer to Bangladesh where the terminal costs around Rs 35,000. So, that means that it is going to be on the fairly expensive side. I do know that Starlink offers $10 plan in Kenya, but let us not forget that in Kenya the conventional fixed broadband plans start at around $20, that is not the case in India where you have the entry level plan of Jio the FTTH plan starts at Rs 399 plus GST. So, even with that we are looking at a Rs sub-500 number and compared to that Starlink is probably six to seven times priced higher. So, at least as things stand, Starlink will be largely restricted to either certain niche high-income population groups or it might be more relevant in areas where it is near impossible to have either a fixed line connectivity or even a 5G FWA connectivity.
Time of India
5 hours ago
- Time of India
Vodafone Idea shares in focus after reporting ₹7,166 cr Q4 loss
Vodafone Idea shares are expected to be in the spotlight on Monday after the debt-laden telecom operator posted a consolidated net loss of ₹7,166.1 crore for the quarter ended March 31, 2025 (Q4FY25). This marks a 6.6% improvement from the ₹7,674.59 crore loss reported in the same quarter last year. However, on a sequential basis, the loss widened from ₹6,609 crore reported in Q3FY25. The company's revenue from operations in Q4FY25 rose 3.8% year-on-year (YoY) to ₹11,013.5 crore, compared to ₹10,606.8 crore in the corresponding quarter of the previous fiscal. Despite the marginal improvement in revenue, the telecom operator continues to face financial headwinds amid stiff industry competition and ongoing subscriber attrition . Vodafone Idea 's subscriber base continued to decline during the quarter, falling to 198.2 million in March from below the 200 million mark in December 2024. This drop marked the lowest level since the merger of Vodafone India and Idea Cellular in 2019. The joint venture between the UK's Vodafone Group Plc and India's Aditya Birla Group was unable to curb churn even after initiating pan-India 5G rollouts in key markets such as Mumbai and Delhi. The company flagged concerns over the company's ability to generate sufficient cash flows to meet its debt obligations and refinance liabilities. Despite the mounting financial pressure , Vodafone Idea has continued to invest in expanding its network infrastructure. The company added over 6,900 unique 4G towers during Q4FY25—the highest quarterly addition since the merger—and deployed approximately 14,500 new sites in the 1800 MHz and 2100 MHz bands to improve capacity and speed. As of March 31, 2025, Vodafone Idea's overall broadband site count stood at approximately 4.94 lakh, including 13,700 Massive MIMO sites and 14,900 small cells. The telco also increased its 4G population coverage from 77% in March 2024 to 83% in March 2025, with plans to raise it to 90% going forward. During the same period, 4G data capacity expanded by 31%, resulting in a 28% improvement in data speeds. Its 5G services, currently operational in Mumbai, Delhi, Chandigarh, and Patna, are expected to be extended to 17 circles by August 2025. Vodafone Idea share price performance The stock has declined 52.57% over the past one year and is down 13.72% on a year-to-date (YTD) basis. Over the last six months, it has dropped 17.22%, while in the last three months, it has fallen 8.47%. On a one-month basis, the stock is down 2.81%. Vodafone Idea shares closed 3.22% lower at ₹6.92 on the BSE on Friday.
