Voda Idea needs to quickly raise $3-4 billion | Economic Times

KOLKATA| MUMBAI: Vodafone Idea needs to quickly raise at least $3-4 billion through a combination of capital infusion by promoters, rights issue and potential sale of fibre and data-centre assets to be able to compete effectively in the market, according to analysts. The struggling telco is close to tying up funding, now that it has clarity on its AGR payment timelines, said people with knowledge of the matter.Vodafone Idea faces annual outflows of around Rs 7,500 crore, they said, with the Supreme Court on Tuesday ordering it to clear AGR dues of Rs 50,400 crore in 10 years, less than the 15 years that the telco had sought.The annual payment factors in a Cabinet decision, upheld by the court, that made a provision to protect the net present value of the dues up to the date of judgment and the dues thereafter, to be realised using a discounted rate of 8%.Speaking to ET Now, Mukul Rohatgi, senior counsel for Vodafone Idea, attributed the 13% fall in the telco’s stock to a “knee-jerk” reaction. “Vodafone Idea will survive,” Rohatgi told ET separately.He added that the telco has suffered in the country owing to many reasons, including policy, but given the longer timeline and a large population that requires mobile phones and data, the carrier will survive.Analysts were also upbeat about Vodafone Idea’s ability to access funding, now that clarity has come on the AGR payout and timelines. “Vodafone Idea can now target a big fundraise aggressively as it has complete clarity on both the quantum of AGR dues and repayment timelines. One can expect it to explore a flotation of long-term bonds, or even zero coupon perpetual bonds in addition to targeting a fresh round of equity financing from its promoters,” said Rajiv Sharma of SBICaps Securities.He added that Vodafone Idea needs to quickly raise at least $3-4 billion through a combination of a capital infusion by promoters, a rights issue and potential sale of its fibre and data-centre assets.GREATER CLARITY“With the final AGR verdict coming in, there is greater clarity on Vodafone Idea’s business case for potential global investors who may be looking to invest in Vodafone Idea,” said Rohan Dhamija, partner and head, India & Middle East, Analysys Mason.The company could make some announcements over the next few weeks on its fundraising plans, said the people cited earlier. The telco needs to show that it’s making all-out efforts to run operations and will bring in fresh investments, they said. 77881927