Indian Express reported that Vodafone Idea might get as much as Rs. 20,000 crore infused over the next two weeks.
Vodafone Idea to Get Some Cash. Finally.
Out of the said amount, its co-promoters will infuse about Rs. 7,000-8,000 crore. The rest Vi will receive in the form of returned bank guarantees (BGs). The promoter infusion, however, looks to be much less than the Rs. 10,000 crore rumored before.
Last week, reports had also come in that ABG chairman Kumar Mangalam Birla can inject some of his own capital into Vi while Vodafone Group, which holds 28.12% in Indus Towers may sell at least a part of its stake in the tower company, followed by external funding to Vi.
Since the government announced the telecom relief package, Vi has seen its fundraising talks go smoother than before. According to IE, the telco will opt for the fund infusion after it has registered a "marginal" improvement on its ARPU, which stands at Rs. 104 as of Q2FY22. This is a positive sign for the cash-strapped telco; it has been trying to raise Rs. 25,000 crore since September 2020 or bring in a strategic partner, but has not had any luck on either.
In another form of telecom sector reforms, the government will return BGs worth Rs. 14,000 crore to Vodafone Idea, should it choose to opt for the 4-year moratorium on spectrum dues. Also, DoT had recently reduced BGs against statutory dues to 20%. It had also added that the telcos need not submit any BGs for getting installment payments in upcoming spectrum auctions.
The telecom sector has seen a string of reforms and relief measures to ease the financial pressure on it. From the 4-year moratorium on statutory dues, to redefining AGR and reducing SUC to zero, the government has really eased pressure on a sector already burdened by low ARPU levels and mounting debts.