Vodafone Idea’s recent confirmation of a relief from the Department of Telecommunications surrounding the AGR-linked dues could serve as a breath of fresh air for the company, though the cash-strapped telecom player may still need to raise fresh funds.
This is according to Centrum Broking’s telecom analyst Piyush Pandey, who suggests Vodafone Idea would require a fundraise of up to Rs 40,000 crore in order to meet spectrum dues.
“It’s a significant relief in terms of cash flow for the next ten years. My only concern is that they will still have to make the spectrum payment in the coming years,” Pandey said in a conversation with NDTV Profit.
Before the start of trade on Friday, Vodafone Idea confirmed the relief from DoT through an exchange filing. As per the DoT directive, Vodafone Idea will follow a three-tiered repayment schedule designed to ease immediate cash flow pressures.
For the first six years, from March 2026 to March 2031, the company is capped at paying a maximum of Rs 124 crore annually.
This will be followed by annual payments of Rs 100 crore for the subsequent four years, ending in March 2035.
However, the relief only relates to Vodafone Idea’s AGR-linked dues and the company would still have to make spectrum due payments.
Piyush Pandey believes Vodafone Idea would need still need to raise a sizable sum in order to make the spectrum due payments.
“Given that the spectrum dues amount to Rs 15,000 crore per year, Vodafone Idea, under current cashflow metrics, would probably need to raise close to Rs 30,000 – 40,000 crore. The company will need a tariff hike as well,” he said.
However, Pandey admitted raising funds will become easier for Vodafone in the wake of the recent clarification from the DoT.
“They will still need to do a big fundraiser, which will become easier thanks to this relief,” he concluded.
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