Multiple reports saying the promoters of Vodafone Idea (Vi) will infuse capital soon into the company have surfaced online. However, Vodafone Group Plc, one of the promoters of the company, isn’t going to infuse any more of its money into Vodafone Idea. This is a little surprising since if Vi wants outside capital, the promoters must show confidence first and give their money to the telco. No official word from the Aditya Birla Group (ABG), another promoter of the company has come yet.
Relief Package Still Doesn’t Instil Confidence In Vodafone Idea
It looks like the relief package announced by the government isn’t enough for the Vodafone Group Plc. The promoter still doesn’t want to infuse any more capital into the company. According to a Business Standard report, a spokesperson from the Vodafone Group said that the company still has the same stance of not infusing any more equity into the company.
The speculation about the promoters stepping in to help the company looks like nothing now. If Vodafone Group isn’t ready to infuse any capital, it doesn’t feel like the ABG will be very excited to do the same.
Looking at this, no outside investor will put their money into Vodafone Idea. If the promoters are hesitant in helping the company, it just shows that they are still not confident about its future. Despite the relief package, the telco still has lakhs of crores worth of debt in its books which it will need to pay once the moratorium period is over.
It looks like Vodafone Idea is on its own from here on. The telco will need to invest heavily in its networks, scale enterprise business, and increase average revenue per user (ARPU) so that it can sustain in the future. The relief package is just a short-term measure and it will only go so long to help the company. It has given it a chance of survival but it won’t be enough if the telco doesn’t do anything to change it.
