Vodafone Idea (Vi) has to pay a total of Rs 10,000 crore towards debt in the next year. But the telco's fundraising plans don't seem to be materialising as there's no concrete statement about the same. Vi's payable debt for September 30, 2024, stood at Rs 7,174 crore, according to a regulatory filing (first reported by BQ Prime). Then, the company recently reclassified its debt of Rs 3,189 crore from non-current borrowings to current maturities of long-term debt. This amount has to be paid by March 31, 2024. As of September 30, 2023, the telco's total debt stood at Rs 2,12,784.6 crore.
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The Indian government is currently the largest stakeholder in the company with over one-third of the company under its name. Aditya Birla Group has promised the telco that it can provide up to Rs 2,000 crore in funds "if necessary". As for the UK promoter Vodafone Group Plc, there's no hope from there. Vodafone UK has carried forward the investment of Vodafone Idea as nil on its books. The company has no hopes for its Indian business.
Vi needs funds to pay its debt on time. The company's net loss for Q2 FY24 widened to Rs 8,737.9 crore and ARPU (average revenue per user) saw a marginal growth to Rs 142. The operating cash flows for the company were down 3% for the first six months ending September 30, 2023. The future of Vodafone Idea depends on whether the company can raise funds in the near future. Otherwise, the debt mountain that Vi is under could potentially crush the telco's future.
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Recently, Kumar Mangalam Birla said that Vodafone Idea's team has worked diligently to build a core network for the 5G rollout. But these words don't amount to much if the telco's fundraising doesn't happen. Without fundraising, Vi can't launch its 5G network as the vendors are not going to offer credit to the company.
