Throughout Tuesday’s buying and selling session, shares of one of many main telecom service suppliers in India surged almost 7 p.c on BSE. The rally got here after stories surfaced that the federal government is contemplating providing aid to the corporate on its Rs. 84,000 crore dues.
With a market cap of Rs. 74,757 crores, at 11:47 a.m., the shares of Vodafone Concept Restricted have been buying and selling within the inexperienced at Rs. 6.9 on BSE, up by round 5.3 p.c, as in comparison with its earlier closing value of Rs. 6.55. The inventory has delivered unfavourable returns of greater than 59 p.c in a single 12 months, and has fallen by almost 0.3 p.c within the final one month.
What’s the Information
The federal government is exploring varied choices to supply Vodafone Concept Restricted extra aid on its large regulatory dues amounting to Rs. 84,000 crore amid rising considerations that the telecom firm might battle to remain afloat with out some flexibility, based on a report by The Financial Occasions.
As of March 2025, Vodafone Concept’s excellent adjusted gross income (AGR) dues stand at Rs. 83,400 crores. The corporate is scheduled to start annual instalment funds from March 2026, persevering with by means of to the top of FY31.
Nevertheless, within the speedy time period, the corporate is required to pay Rs. 18,064 crore by March 2026. With a money and financial institution stability of solely Rs. 9,930 crore on the finish of March 2025, there’s a actual concern throughout the authorities that, with out some type of aid, Vodafone Concept might not be capable of maintain operations.
So, what are the choices the federal government may think about? One proposal below dialogue is to increase the compensation timeline from the present 6 years to twenty years. Together with this, there’s a suggestion to modify from compound curiosity (which incorporates curiosity on curiosity) to an easier curiosity mannequin. If applied, this might considerably cut back the corporate’s annual compensation burden. Nevertheless, even with extra lenient phrases, there are considerations about whether or not Vodafone Concept’s present money flows are robust sufficient to satisfy even the decreased dues.
Another choice being weighed is permitting the corporate to make a token annual cost, probably within the vary of Rs. 1,000-1,500 crore, till a closing decision on the AGR situation is reached. This is able to ease short-term strain whereas giving the federal government time to evaluate a long-term technique.
In accordance with sources, the federal government’s main purpose is to stop the collapse of Vodafone Concept. A shutdown would have severe implications, particularly for the Centre itself, which is the most important shareholder with a 49 p.c stake within the firm. Moreover, a big chunk of the excellent dues is owed to the federal government, which means the federal government stands to lose probably the most if the corporate goes below.
On thirtieth Might, the corporate’s Board permitted a fundraising plan of as much as Rs. 20,000 crores. The Capital Elevating Committee has been authorised to judge and decide the suitable route for the fundraising and deal with all associated issues.
Financials & Extra
Vodafone Concept reported a marginal progress in income from operations, experiencing an increase of almost 4 p.c YoY, growing from Rs. 10,607 crores in This autumn FY24 to Rs. 11,014 crores in This autumn FY25.
Throughout the identical interval, the corporate additionally reported an enchancment in its backside line, with internet loss narrowing by round 6.6 p.c YoY, from Rs. 7,675 crore to Rs. 7,166 crore.
Through the March quarter, Vodafone Concept misplaced 1.6 million subscribers, bringing the full subscriber loss for the total fiscal 12 months to 14.4 million. The Common Income Per Consumer (ARPU) rose barely to Rs. 164 from Rs. 163 within the earlier quarter. Nevertheless, this stays beneath rivals like Reliance Jio (Rs. 206) and Bharti Airtel (Rs. 245).
Written by Shivani Singh
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