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Vodafone Idea’s Financial Viability in Doubt as Govt Rules Out Further Equity Conversion: Report
- The government is exploring additional relief measures for Vodafone Idea (Vi) to address concerns about its financial sustainability amid uncertainty over the company's long-term viability.
- Further equity conversion by the government to increase its stake in Vi beyond 49 percent has been ruled out, with alternative options like extending AGR dues repayment from 6 to 20 years still posing challenges for Vi's operations beyond FY29.
- The Department of Telecommunications (DoT) foresees financial strain for Vi beyond FY26, with doubts about the company's ability to meet full instalments and liabilities post-FY29 despite potential restructuring.
- Vi's cash flow challenges have intensified, with the company reporting a cash and bank balance of Rs 9,930 crore in March and the government ruling out further conversion of dues into equity following a previous Rs 36,950 crore conversion.
- Analysts warn of a looming cash shortfall for Vi beyond FY26, estimating a need for over Rs 25,000 crore in loans to meet obligations, with a potential annual cash deficit of Rs 20,000 crore due to delays in funding and AGR dues relief.
- Vi's net loss in January–March 2025 was Rs 7,166 crore, with auditors expressing concerns about the company's cash flow generation to meet financial obligations, prompting Vi's board to approve a plan to raise Rs 20,000 crore through equity or debt.
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