Recently, Supreme Court had dismissed pleas by Indian telecom operators to re-compute Adjusted Gross Revenue (AGR) dues. The companies had sought corrections in the AGR calculations, a penalty reduction, and interest rate adjustments.
This resulted in significant implications specifically for Vodafone Idea (VIL), whose burden has now increased to Rs 70,320 cr as of FY24. Naturally, the investors got nervous and started dumping the stock.
Management of VIL since then has been trying to calm the nerves. It hopes to get relief from the govt, which currently owns 23.15% of VIL.
Now the Company has further shown it’s intent to continue running the business and revive it.
It has announced USD 3.6 billion (i.e., Rs 30,000 cr) deal with Nokia, Ericsson and Samsung, for supply of network equipment over a period of three years.
- Equipment purchase is directed towards expanding the 4G population coverage from 1.03 billion to 1.2 billion, launching 5G in key markets and capacity expansion to support data growth.
- The supplies would begin from the coming quarter starting October 2024.
- Funding for the capex would initially come from the Rs 24,000 cr equity raise that it concluding recently. For the long-term Capex, the Company claims to be in advanced stage of discussions with its existing and new lenders to tie up Rs. 25,000 cr of funded and Rs. 10,000 cr of non-fund-based facilities.