A hotel employee clears a table after Vodafone Group and Idea Cellular news conference in Mumbai, India March 20, 2017. REUTERS/Danish Siddiqui/File Photo
| Photo Credit:
DANISH SIDDIQUI

The Indian government will waive off or defer a portion of the telecom industry’s AGR dues, estimated Ambit Insights in its report, noting the Supreme Court’s comment on not interfering with government intervention. The firm said that a waiver enables Vodafone Idea (Vi) to tap bank funding by March 2026.

Deferring dues not an option

The government already has 49 per cent stake in Vi and does not intend to increase its stake. With promoters unable to commit additional capital, Ambit said conversion of dues into equity appears to be an unviable alternative.

“Deferring dues would merely postpone the issue without resolving it. If the government chooses this route, Vi may struggle to secure bank loans essential for funding its growth capex,” said the report.

Vi still at the brink

Vi earmarked ₹22,000 crore raised via FPO and preferential allotment to catch up its network coverage and capacity with peers. Despite tariff hikes in the previous year, its annualised Q3 cash EBITDA of ₹9,800 crore, isn’t enough to pay off ₹16,900 crore due in FY26. In Jue 2025, Vi will likely receive ₹6,400 crore equity funding from Vodafone PLC as an indemnity payment. However, the same isn’t sufficient for Vi to raise bank loan funding of ₹25,000 crore, for the company to carry out its target ₹50,000-55,000 crore FY25-28 capex.

Published on May 23, 2025