Indus Towers reports Rs 708 crore loss in Q3

In accordance with a regulatory filing, the company's revenue declined by about 2 per cent to Rs 676.5 crore during the reported quarter from Rs 692.74 crore in the December 2021 quarter.

Indus towers, the largest telecom infrastructure provider in the nation reported a consolidated loss of Rs 708.2 crore for the third quarter of 2022 on Tuesday. This loss was primarily caused by a shaky recovery from Vodafone Idea.

Indus Towers reported a Rs 1,570 crore profit around the same time last year.

According to a regulatory filing, the company's sales decreased by nearly 2% to RS 676.5 crore for the quarter ending in December 2021.

Indus has recorded an impairment of the revenue equalization asset for VIL at Rs 493 crore and added an additional allowance of doubtful debt of Rs 2,298.1 core as a result of VIL's reluctance to remain on higher payment plans.

In the fiscal second quarter, Indus had provisioned Rs 1770.9 crore as doubtful debt because of Vi's situation. The telco owes the tower company about Rs 7500 crore. Vi's monthly dues are upwards of Rs 300 crore to the Indus Towers.

Although VIL had offered Indus Towers a payment plan in which they express their willingness to pay a portion of the invoiced amount until December 2022 and 100% thereafter, together with the phased payment of the past-due amounts that would accrue until December 2022, between January 2023 and July 2023.

VIL had also received a stern warning from Indus Towers that the telecom service provider's access to the towers would be terminated if it failed to pay its debts. Since Indus Towers provides the majority of Vi's towers, denying Vi access to those towers would cause serious problems for Vodafone Idea and its customers.

Bharti Airtel Limited, a significant shareholder in the company, will suffer as a result. Bharti Airtel along with its wholly-owned subsidiary Nettle Infrastructure Investments Limited held 47.95 per cent of shares and Vodafone Group Plc through its indirect wholly-owned subsidiary companies held 21.05 per cent shares in Indus Towers.

"Our financial performance remains impacted as we have adopted stringent accounting practices amid a persistent shortfall in collections. During the current quarter, the funding plan of the said customer has not materialised and although the committed part payment till December has been received, the customer has indicated challenges in complying with a higher payment plan in future," Indus Towers, Managing Director and CEO, Prachur Sah said in a note.

According to reports, Airtel is willing to waive its right of first refusal if Vodafone Idea decides to sell the remainder of its Indus Towers stocks so that it may pay Vi.