DoT has Not Met Any Potential Investor for Vi so Far: Report

Reported by Tanuja K September 11th, 2023 at 10:38 am

If Vodafone Idea keeps making payments, the government won't have to invoke the bank guarantees. However, if Vi doesn't make the payments, then the government will encash the guarantees.

Highlights

The Department of Telecommunications (DoT) has not met any potential investors for Vodafone Idea (Vi).
The cash-strapped telecom operator is struggling to raise funds through equity and debt because of its current situation.
The telco is losing customers and hasn't even launched 5G because of not having enough money to do so in the first place.

dot has not met any potential investor

The Department of Telecommunications (DoT) has not met any potential investors for Vodafone Idea (Vi). The cash-strapped telecom operator is struggling to raise funds through equity and debt because of its current situation. The telco is losing customers and hasn't even launched 5G because of not having enough money to do so in the first place. According to an ET report, the telco has paid half of its license and spectrum usage charge (SUC) fee for the March quarter. Further, for the June quarter, the telco has promised the telecom department that it will clear 90% of the dues in a phased manner along with the interest.

If Vodafone Idea keeps making payments, the government won't have to invoke the bank guarantees. However, if Vi doesn't make the payments, then the government will encash the guarantees. Two weeks back, there were reports that said Vi is likely to close fundraising with potential investors in 10 days. But nothing of that sort has happened so far. Until the time the telco manages to raise funds, it can't aggressively invest in its mobile networks and also can't launch 5G.

Vi told the telecom department that they have made significant progress with several groups of investors, but nothing specific has been informed by the company yet. While a promoter entity has also promised an equity infusion of Rs 2000 crore, it hasn't happened yet. The investors likely want the promoters to infuse more capital into the company.

Currently, it is the government who is the largest stakeholder in the company. While the government doesn't interfere in the day-to-day business of Vi, the outside investors would be a little wary of the fact that they will be investing in a company whose largest stakeholder is the central government.

ET report added that Vi is close to raising Rs 4000 crore short-term loan from SBI to pay for its pending statutory dues as well as spectrum instalment.