Vodafone Idea Limited (VIL), the third-largest telecom operator in India, has cleared a majority of its past dues towards Indus Towers. This helped Indus Towers in generating a free cash flow of Rs 1,570 crore in the quarter ending June 2025. Indus Towers saw its trade receivables coming down by Rs 406.4 crore during the June quarter. Vi had particularly paid back Rs 88 crore in Q1 FY26. The company has decided not to keep the free cash idle.
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"We have collected most of the backlog receivables. As part of our cash management, instead of keeping the cash idle, we have either reduced our debt or used it for a very strategic acquisition," said Prachur Sah, CEO of Indus Towers at the company's earnings call on Thursday. In the coming quarters though, it will be interesting if Vi will be able to make timely payments or not. The telco has already said that there's uncertainty as the support from Department of Telecommunications (DoT) will determine how its finances will be.
For the unaware, Vi needs to start paying the deferred AGR (adjusted gross revenue) dues soon. This would not be possible for Vi to pay as its finances aren't that strong. Some support from the government needs to come to ensure that Vi can sustain with its current finances.
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On the matter, Indus said, "The board will continue to monitor the evolving situation closely and reassess its decision by the end of the financial year. The board remains fully committed to creating value for the shareholders, including by way of earliest possible reinstatement of distributions basis the above factors."
Indus will likely see a slowdown in business as the telcos have reduced their pace of 5G tower addition.
