Vodafone Idea (vi): Financial Troubles & Government Relief Packag

The Division of Telecoms, based on the existing and prospective future financial situation of Vi, thinks that if the firm is needed to pay the complete Rs 18,064 crore instalment due by end-FY26, it would not have funds to satisfy the liability in FY27. Also if yearly instalments are minimized to Rs 6,000-8,500 crore each by expanding the settlement period, it still would not bring any type of concrete advantages. Given the telco’s cash money circulations, it might not satisfy the responsibilities beyond 2028-29.

Auditor’s Warning on Vi’s Financial Health

In Vi’s January-March profits report, auditor SR Batliboi & Associates warned that the operator’s economic performance was harmed by its inability to produce capital that it required to settle/refinance its obligations as they drop due.

Brokerage firm Motilal Oswal has cautioned that absence of a relief on the AGR charges and lack of an innovation on the firm’s efforts to elevate funds via financial debt, might lead to Vi encountering an estimated yearly cash shortage of Rs 20,000 crore.

AGR Dues and Cash Flow Challenges

Other options being thought about, such as permitting Vi to pay the adjusted gross revenue-based defaults over two decades, rather than the existing 6, may still not give sufficient cash flows for sustaining business operations beyond 2028-29, said federal government officials. They added that various options were being discovered.

Adhering to a request from Vi, the government transformed Rs 36,950 crore of range arrears right into equity in March, ending up being the largest shareholder, with a 48.99% risk. These arrears were connected to pre-2021 spectrum public auctions.

Government’s Equity Conversion in Vi

The Division of Telecommunications, based on the possible and existing future monetary circumstance of Vi, thinks that if the business is called for to pay the complete Rs 18,064 crore instalment due by end-FY26, it would certainly not have funds to fulfill the obligation in FY27. Also if yearly instalments are minimized to Rs 6,000-8,500 crore each by expanding the payment period, it still would not bring any concrete benefits. Prior to the equity conversion, Vi shared its estimates till 2030-31, which is the deadline mandated by the Supreme Court to pay the AGR fees. Considering that the federal government had provided a four-year moratorium on settlement of AGR and range fees from FY22, Vi currently requires to remove the whole financial obligations in six instalments, starting with the current financial year.

These consist of “extending the period of AGR repayments from the arranged six yearly instalments of Rs 18,064 crore to over 20. However regardless of that, the lasting sustainability of the company stays in doubt,” one authorities claimed on condition of anonymity.

Vi reported a net loss of Rs 7,166 crore in January-March, wider than Rs 6,609 crore in October-December 2024. Its board has authorized raising a further Rs 20,000 crore via equity or debt, for which the telco is in discussions with loan providers.

“While the business can fulfill the obligations in the existing , it will not be possible starting FY27 unless it manages over Rs 25,000 crore financings from banks and financial institutions,” stated an expert tracking the telecom field.

Expert’s Views on Vi’s Sustainability

The federal government, which is servicing a relief package for Vodafone Concept (Vi), is faced with problems regarding the telecommunications driver’s economic feasibility in the lack of a waiver of its debts on spectrum usage costs. The federal government has said it has no plan to convert even more arrears into equity that would certainly increase its stake in the business past the existing 49%.

“The team’s capacity to proceed as a going concern depends on assistance from the DoT on the AGR matter, successfully arranging funding and generation of cash flow from its operations that it needs to settle its liabilities as they drop due,” the auditor claimed.

Vi’s Post-Moratorium Payment Issues

Grim Numbers “The company had actually revealed its failure to meet the post-moratorium settlement timetable of range and AGR payments throughout different conferences with DoT,” said a third authorities. Vi’s projected settlement for FY26 was greater than Rs 30,500 crore before the government converted part of the fees into equity.

Prior to the equity conversion, Vi shared its forecasts till 2030-31, which is the target date mandated by the Supreme Court to pay the AGR fees. Given that the government had offered a four-year halt on payment of AGR and spectrum dues from FY22, Vi currently requires to remove the entire arrears in 6 instalments, starting with the existing. Annually, the instalment has to be made by March 31.