Q-A session Vi earnings call Q3 FY23 highlights

On net debt of the company after conversion of government’s equity. Once that happens, then in that case, as compared to the amount that we show on the balance sheet, there’ll be an initial reduction. Thereafter, it will be made up as the moratorium period completes.

On impact on the receivables, after ATC converts. This is a reduction of INR16,000 crores roughly from the debt which has been converted to equity. From a balance sheet perspective, this should result in reduction of debt. However, what is the final accounting presentation, we will have to discuss with the auditors and decide. So, we’ll have to see. But as of today, with the conversion, in reality, the debt stands reduced by about INR16,000 crore.

Once ATC is subscribing to the OCD post the shareholders’ approval, the payables to ATC will reduce by INR1,600 crores, and they will get converted to a financial creditors status as the subscriber to the OCD.

On annual spectrum and AGR payments from October 2025 to September ’26. On the AGR front, and I’m giving you these figures because AGR, the finance figures have to be communicated to us by DoT, but based on our calculations, it will be about INR9,100 crores of regular instalment and about INR7,400 crores of instalment which is arising out of the deferment. As far as the spectrum instalments are concerned, it will be about INR14,800 crores for the original instalment and about INR10,000 crores for the new instalments tree which is arising out of the deferment.

On the bank debt you mentioned that there’s INR13,200 crore of bank debt, but you also mentioned in the notes that around INR8,000 crores is payable in the next one year. We have to de-link the existing debt and servicing of bad debt from the new funding. The new funding is for investments. The existing debt which is there, it will not be deferred. It will continue to be repaid on maturity.

On the question of funding. We have been engaged with the banks post the reforms package was announced. We have made progress with them. But at some point of time, the discussions could not progress further because the banks’ requirement was that the government conversion has to happen first. And only once that has happened, then we can engage further.

So let’s say we have had constructive discussion with our consortium of bankers in the last couple of months. And with the government conversion now having happened, those discussions can progress further because the basic condition of government conversion has been fulfilled. We have already started engaging with them, and the discussions are progressing as we speak.

On net debt after the government is allotted shares. Is INR16,000 crores lower.

Payments to be made once the moratorium is lifted. Should be INR41,300 crore.

On thought process regarding specific liabilities which will come due in FY’26? We have no intention to prepay anything because we would want to use whatever liquidity is available with us to make the investments. So. there is no question of prepayment.

Just for the sake of completeness, there are instalments which were INR14,800 crores of the regular instalment. There is about INR1,700 crores of the 5G spectrum instalment which will get added on to that. So that INR14,800 crores would actually become INR16,500 crores, which is the regular instalments, unrelated to the reforms package. And INR9,100 crores, roughly, of the AGR is again, an instalment which is independent of the reforms package.

The other two instalments of INR10,000 crores on spectrum and INR7,400 crores of AGR or INR17,400 crores in all is a deferred amount out of the reforms package. The reforms package also provides that these instalments can be converted to equity and that judgment can be made for each and every instalment independently post the moratorium period. So when one looks at these instalment, these have to be seen a little differently. One is the regular stream instalment, second is the instalment arising out of the deferment, which are governed by the reforms package and they may have a somewhat different implication going forward.

On how do you see any risk as competition ramps up 5G coverage by end of ’23? Our effort will be that as soon as funding is in place, we kind of expedite our rollout to have a presence in the geographies which matter, particularly in the context of 5G and so that we are able to compete as early as possible.

On vendor payments. ATC has agreed to convert their payable into an OCD instrument, is being addressed through that route.

Indus Towers have themselves made a number of disclosures in their financials which we are aware of. We continue to constantly remain engaged with Indus.

We are working in the spirit of partnership and all our vendors, including Indus have been very supportive to support us in this interim period of difficulty. It is very clear that we need to get funding to be able to make investments and improve our operational cash flow to be then able to improve our vendor payment situation.

We are prioritizing all payments, which are essential for the continuation of operation. And beyond that as we get the funding and start incurring and making investments and as we see cash generation from operations going up, that would be the basis of our starting to clear the backlog. Our endeavor is that till we get to that point with the funding in place when the CapEx cannot being dependent on operational cash flow, we can then start to gradually unwind the receive — the payables which have accumulated until now.

On license fee payments to govt. It is right that we have paid a lesser amount than the 100% amount. We are engaged with DoT, we have proposed a plan to them and we are requesting for their support to allow us slightly delayed payments in the interim. These discussions are on.

On the 5G minimum rollout obligation, it is not a large investment and we will comply with it.

Closing remarks. We have reported six quarters of sequential growth in several key metrics including ARPU and 4G subscribers. We remain focused on providing superior data and voice experience, and are building a differentiated digital experience, adding several digital offerings in the recent months.

We have issued equity shares to the government consequent to conversion of the interest related to deferment of AGR and spectrum dues. The transaction with ATC clearly reflects the relationship that the company shares with one of its key vendor, and their belief in long term prospect of the company.

With these positive developments, we continue to remain engaged with our lenders for further debt fundraising as well as with other parties for equity or equity like fundraising to make the required investments from network expansion and 5G rollout to compete effectively.

We have been improving our performance in the last six quarters with limited investments, and we are confident that with the investments coming on stream, we will be able to make more meaningful improvement in our overall performance.

CT Bureau