Vodafone Idea's fundraising is highly dependent on the new government that is formed after the election results are announced. Vi recently raised a total of around Rs 20,000 crore in equity funding through FPO (subsequent public offer) and a promoter entity. The telco also plans to raise another Rs 35,000 crore through debt. However, this will only happen when investors and lenders gain clarity about whether the government is prepared to convert part of Vi's contribution into further equity. Note that this has already happened once when the government converted Vi's interest on the deferred payments and now the central government is the largest stakeholder in the telecom sector.
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The telco's management said they will further explore whether they can get more relief by offering more shares to the government against their statutory dues. Additionally, Vi has approached the Supreme Court (SC) alleging miscalculation of adjusted gross revenue (AGR) by the Department of Telecommunications (DoT). If SC chooses the side Goods appeals, it will be a big relief for the telecom provider and its investors.
This will provide clarity to prospective investors and lenders so that they can make a decision on giving money to Vodafone Idea Limited (VIL), an ET report said.
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Banks and investors will look further into Vi's future plans. There's no doubt that Vi can deliver healthy returns in the coming years. To achieve this, however, the telecom provider will have to run a tight ship with strong plans and effective and efficient implementation.
Vi has made timely payments to the banks and lenders. The telco has reduced a large part of its bank contributions in the past year. This will further increase the credibility of the company to refund the amount. However, banks are already exposed to Vi and will carefully consider giving their money to the telecom company, especially in a situation where the telecom company is doing its best not to lose its customers to the competition.
