Vodafone Idea Limited (VIL), the third-largest telecom operator, has said that they are counting on the government to find a solution to support the company. The telco needs the help of the government in the coming financial year when its payout towards statutory dues will increase. The moratorium period will end in FY26 and payout towards the adjusted gross revenue (AGR) dues will go up for the telco. This will impact its cashflow situation severly, and without any support from the government, that would make it difficult for Vi to expand its networks.
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Vi has previously said that the funds it is raising is mostly earmarked for capex while the revenues it is generating from the services will go towards paying off liabilties. However, a higher payout could dent this plan for the telco, and thus, it is expecting more support from the government. It is worth noting that the government has previosly managed to support Vi when it needed it the most. Also, the government is a stakeholder in the struggling telecom operator.
"The government is cognizant of the fact that support is required, and I am confident they will find a solution, (especially) since Vi has already raised Rs 26,000 crore of equity and started its (network) investment cycle," said Akshaya Moondra, CEO of Vodafone Idea Limited (VIL).
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Much recently, the government waived the bank guarantees (BGs) submission for the telcos which was a major relief. Vi had previously expressed to the government that it is in no position to submit BGs, and thus, this is benefitting the company's ability to raise more funds. However, the telco will have to submit on time BG worth Rs 6,090 crore, as per a MoneyControl report. This is to settle the shortfall for the 2015 auction.
Lenders are keen to see what the government decides to do in the AGR matter. The goverment's decision will be critical to Vi's ability to raise more funds from the lenders.
