Risks of further slip in Voda Idea financial profile lower, say lenders

Lenders of Vodafone Idea Ltd have said the risks of the company's financial profile worsening further are lower now - thanks to the recent relief package to the telecom sector - and this will further help eliminate the need to hike interest rates, at least for now.

- ABHIJIT LELE

Along with infusion of funds, lenders said they expected the promoters to work on tariff revision.

Bank executives said they have begun a modelling exercise on Vi's financial profile that is likely to emerge from the government's package, which might have created some room for using a part of current cash-flows to make payments for NCDs.

In September 2021, the government cleared a package allowing telcos a moratorium on the payment of adjusted gross revenue (AGR) dues as well as spectrum payments prospectively for the next four years.

Under the relief package, the company is required to make the first tranche of AGR payments in March 2022, while the spectrum payments are to resume from April 2022.

"With everything being worked out, and the possibility of raising capital in the coming days, things are expected to be under control," an official of a Mumbai-based large public sector bank said.