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Vi plans equity swap for govt dues

Vodafone Idea Ltd. will be looking to convert government dues payable in fiscal 2026 and 2027 to equity, further diluting the stakes of its shareholders.

“…In FY26 and FY27, we will probably be looking at the conversion of the instalments, which are as per the (government) reform package convertible,” Akshaya Moondra, chief executive officer of Vodafone Idea, said during an earnings call.

The company will have dues of nearly Rs 30,000 crore in FY26, of which nearly Rs 28,000 crore is owed to the government in AGR dues.

The government had earlier converted the interest accrued on its AGR dues into equity, making it the biggest shareholder in the debt-laden telecom operator with a 33.3% stake. After the latest equity raise, the government stake has now come down to nearly 24%.

Moondra also highlighted that the equity fundraise of Rs 20,075 crore, along with the debt that the company is planning to raise, will be used largely towards capex for the expansion of 4G services and the rollout of 5G services.

The Aditya Birla and Vodafone Plc-backed company is also in the process of raising Rs 25,000 crore of debt from banks and Rs 10,000 crore from non-fund-based facilities.

“The internal cash generation would largely be used for clearing the existing debt, which is (due) to some vendors,” he added.

Tariff Rationalisation
Moondra echoed Bharti Airtel CEO Gopal Vittal’s sentiment for tariff rationalisation and the need for usage-based plans.

Due to “cheap” availability of data and unlimited plans, “a lot” of data consumption is avoidable, he said. Moondra believes that if the prices are increased, the “avoidable consumption” may come down.

“We are not saying that there’ll be a drastic change, but I believe if somebody is consuming 25 GB a month, (and) if you increase the price and they find that to be a limitation and in the same price, they can get 20 GB or 15 GB a month,” Moondra said.

Moondra also said that he is not concerned about the ability of the consumers to absorb tariff hikes. Not a single user will stop using the service due to a tariff hike, he said.

The company is planning to roll out its 5G service on a “large scale” in the next six months, even as the top priority remains 4G coverage, Moondra said.

“I would say that 5G investment will be a bit iterative in nature, in terms of timing, and we will make investments as the market evolves.”

The company has been losing subscribers because of a lack of 4G coverage and the absence of 5G services, unlike its peers. NDTV Profit

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