NEW DELHI — Vodafone Idea has paid INR 1,701 crore to the Department of Telecommunications telecom department towards the 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 had 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 INR 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 fundraising from investors and financial institutions against the envisaged timelines, while the ratings have been reaffirmed.
The rating factor in the experienced management team, pan-India telecom presence with high brand recognition supported by a stable outlook for the 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 Public Asset Management.
Furthermore, the ratings take cognisance of the receipt of commitment from a promoter group entity confirming direct or indirect financial support to INR 2,000 crore to address impending company obligations arising out of any cash flow mismatch.
The ratings, however, remain underpinned by VIL’s deteriorated financial risk profile, wherein, the tangible net worth has eroded, its constantly declining subscriber base and delay in 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.