Vi's future in doubt as government rules out more equity conversion
The Indian government is grappling with Vodafone Idea's (Vi) financial woes, debating relief measures amid concerns about its long-term viability. Even extending payment tenures for adjusted gross revenue (AGR) dues may not suffice, potentially leaving Vi unable to meet liabilities beyond 2028-29.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
The government, which is working on a relief package for Vodafone Idea Vi ), is confronted with concerns about the telecom operator 's financial viability in the absence of a waiver of its arrears on spectrum usage charges . The government has said it has no plan to convert more arrears into equity that would increase its stake in the company beyond the existing 49%.Other options being considered, such as allowing Vi to pay the adjusted gross revenue-based arrears over 20 years, instead of the current six, may still not provide enough cash flows for sustaining company operations beyond 2028-29, said government officials. They added that various options were being explored.These include 'extending the tenure of AGR payments from the scheduled six annual instalments of Rs 18,064 crore to over 20. But despite that, the long-term sustainability of the company remains in doubt,' one official said on condition of anonymity.The Department of Telecommunications, based on the current and potential future financial situation of Vi, believes that if the company is required to pay the full Rs 18,064 crore instalment due by end-FY26, it would not have funds to meet the liability in FY27. Even if annual instalments are reduced to Rs 6,000-8,500 crore each by extending the payment period, it still would not bring any tangible benefits. In fact, given the telco's cash flows, it may not meet the liabilities beyond 2028-29.In a worst case scenario, the payment tenure could be as long as 50-100 years, said a second official.At the end of March, the carrier's cash and bank balance totalled Rs 9,930 crore.Following a request from Vi, the government converted Rs 36,950 crore of spectrum arrears into equity in March, becoming the largest shareholder, with a 48.99% stake. These arrears were related to pre-2021 spectrum auctions.Prior to the equity conversion , Vi shared its projections till 2030-31, which is the deadline mandated by the Supreme Court to pay the AGR dues . Since the government had given a four-year moratorium on payment of AGR and spectrum dues from FY22, Vi now needs to clear the entire arrears in six instalments, starting with the current fiscal year. Every year, the instalment has to be made by March 31.'The company had shown its inability to meet the post-moratorium payment schedule of spectrum and AGR payments during various meetings with DoT,' said a third official. Vi's projected payment for FY26 was more than Rs 30,500 crore before the government converted part of the dues into equity.'While the company can meet the liabilities in the current fiscal year, it won't be possible starting FY27 unless it manages over Rs 25,000 crore loans from banks and financial institutions,' said an analyst tracking the telecom sector.Brokerage firm Motilal Oswal has cautioned that absence of a relief on the AGR dues and absence of a breakthrough on the company's efforts to raise funds through debt, could result in Vi facing an estimated annual cash shortfall of Rs 20,000 crore.In Vi's January-March earnings report, auditor SR Batliboi & Associates cautioned that the operator's financial performance was hurt by its inability to generate cash flows that it needed to settle/refinance its liabilities as they fall due.Vi reported a net loss of Rs 7,166 crore in January-March, wider than Rs 6,609 crore in October-December 2024. Its board has approved raising a further Rs 20,000 crore through equity or debt, for which the telco is in discussions with lenders.The Rs 72,300-crore market cap company has seen its share price slide from nearly Rs 10 apiece in January to Rs 6.7 as of Friday.'The group's ability to continue as a going concern is dependent on support from the DoT on the AGR matter, successfully arranging funding and generation of cash flow from its operations that it needs to settle its liabilities as they fall due,' the auditor said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
15 minutes ago
- Time of India
Technology will gradually take over manual cleaning work: Minister
Mysuru: In the coming years, technology will gradually take over manual cleaning work, much like how wars are now fought with technology, said HC Mahadevappa, minister for social welfare and Mysuru district minister. Addressing a gathering at the Karnataka State Open University (KSOU) auditorium on Friday, he urged pourakarmikas (civic workers) to ensure their children are well-educated and aim for higher positions in society. The occasion marked the distribution of permanent appointment order letters to pourakarmikas who are now permanent employees. Out of 10,000 pourakarmikas made permanent across Karnataka, 219 belong to the Mysuru City Corporation. Highlighting the transformation, the minister said that these workers, who earlier earned around Rs 17,000 per month, will now receive double the salary along with full govt benefits. "This permanent status will help workers lead a more dignified life and elevate their families socially and economically," he said. Mahadevappa also compared conditions in other states, noting that in Madhya Pradesh, pourakarmikas are paid only Rs 10,000—below minimum wage standards. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 오스템 임플란트 받아가세요 임플란터 더 알아보기 Undo He reassured that more regularisation drives would be conducted in Karnataka to benefit more workers. Urging financial prudence, the minister advised pourakarmikas not to waste their increased earnings but instead invest wisely in their families' future. Responding to a request by former mayor Narayan regarding the 88 temporary pourakarmikas who died while on duty, the minister instructed the MCC commissioner to take appropriate steps to support their families. Avinash S, a civic worker, shared his personal experience, expressing gratitude to the govt. "Earlier, I struggled with a meagre salary of Rs 17,000. Now, with a permanent job and better income, I feel motivated and can finally think about marriage and a secure future," he said. Narasimharaja MLA Tanveer Sait, deputy commissioner Lakshikanth Reddy, MCC commissioner Shaikh Tanveer Asif, former mayor and Pourakarmika leader Narayan, and pourakarmika leader Mara were present.
Economic Times
16 minutes ago
- Economic Times
Techie takes 9 years to save Rs 1 crore. But his next Rs 1 crore came in just 18 months. Shares lessons
Inside a software engineer's Rs 2 crore journey Building wealth often feels like a slow, uncertain process—especially in the early years of one's career. But for some, the results begin to speed up dramatically with time, discipline, and the right financial choices. A software engineer working in a core cybersecurity product firm recently shared his journey to achieving a Rs 2 crore net worth—an achievement that highlights how financial discipline and investing can accelerate wealth creation, even for salaried professionals without windfalls or on Reddit, what stands out in his story is the contrast in timelines: while it took him nearly nine years to save his first Rs 1 crore, he managed to accumulate the next Rs 1 crore in just a year and a half. His journey offers a practical roadmap for others in the tech industry aiming for financial independence. He began his career 11 years ago and admits that the early years were not financially productive. There was a slight reset in 2018 around the time of his marriage, which slowed things down further. However, by September 2023, he finally reached the Rs 1 crore mark. Just 18 months later, his net worth doubled—an acceleration that even he hadn't expected. The sharp turnaround, he explains, is mainly due to a significant shift in his investment strategy. With a growing portion of his portfolio now in equities, he's seeing the real benefits of compounding. Of course, his salary also saw a big jump during this period, meaning he could save more. He also became more intentional about asset allocation, tax efficiency, and goal planning. This acceleration wouldn't have been possible without consistent investing and a high savings rate. Despite having a family of four—including twin boys—the engineer has managed to keep his monthly expenses around Rs 1.2 lakh. This includes rent, school fees, groceries, domestic help, utilities, fuel, insurance, and subscriptions. A disciplined approach to budgeting allows him to invest nearly 60% of his income—close to Rs 2 lakh every month. He uses SIPs and avoids speculative investments are heavily skewed towards equity, which he credits for the rapid growth in his net worth. He believes that sticking to a strategy and being consistent is more effective than constantly trying to time the market or chase aiming for a Rs 10 crore corpus by age 45, he has revised his Financial Independence, Retire Early (FIRE) goal to Rs 20 crore by age 42. The change was prompted by rising expenses related to children, lifestyle upgrades, and a growing income. He now factors in inflation more realistically and includes buffers for future healthcare and education costs. However, his focus has shifted from early retirement to achieving financial freedom, with the intent to transition into a less stressful, passion-driven job in his already has comprehensive term and health insurance coverage and has ticked off personal milestones like buying a car. His outlook reflects a balanced approach to financial planning—being prepared for the future without sacrificing quality of life of the most critical contributors to his success has been career growth. He points out that while smart investments are essential, the real boost came when his income started to rise in the latter part of his career. The first few years were slow, but skill development and job switches eventually led to better compensation and, in turn, faster wealth said that in 2014 at the start of his career, his salary was Rs 3.25 LPA which jumped to Rs 16.50 LPA in 2020. By 2024, it saw a massive jump to Rs 95 LPA, driven by new skill development, certifications, and moving into a niche within emphasises that focusing on career advancement and skill-building in the initial years pays off in the long run. High income, when paired with disciplined investing, creates a solid foundation for long-term financial success. ( Originally published on Jun 18, 2025 )
Time of India
30 minutes ago
- Time of India
Gujarat govt allots Rs 3,395 crore to urban civic bodies for development projects
Gandhinagar: The state govt on Friday gave an in-principle approval of a sum of Rs 3,395 crore for four municipal corporations, including three newly formed municipal corporations, and two municipalities. Tired of too many ads? go ad free now An official statement said that a sum of Rs 3,263 crore was sanctioned for the Surat Municipal Corporation, while Nadiad Municipal Corporation was provided a sum of Rs 45 crore. Surendranagar Municipal Corporation was given Rs 63 crore, and Rs 17 crore was sanctioned for Anand Municipal Corporation. The funds, approved under the Mukhyamantri Sheheri Vikas Yojana, will be used for providing facilities to outgrowth areas, setting up unique identity projects, urban mobility, and infrastructure projects like storm water drainage, water supply, and solid waste management. Funds were also approved for water tanks, pipelines, and street lighting projects in the outgrowth areas of the two municipalities of Songadh and Bharuch. Songadh municipality will receive Rs 3.99 crore, and Bharuch will receive Rs 0.95 crore, an official statement said. The state govt is observing 2025 as urban development year with the theme of "earn well and live well". The statement said that the govt intends to provide quality services in cities and their outgrowth areas.
