The absence of Aditya Birla Group chairman Kumar Mangalam Birla from the assembly additionally drew concern, with a couple of shareholders expressing disappointment over his non-attendance. The federal government is the most important shareholder in Vodafone Concept with a 49% stake, adopted by promoters—Vodafone Group at 16.07% and Aditya Birla Group at 9.5%. Retail traders personal 14.96% of the corporate.
“Regardless of the earlier fundraises, together with the federal government conversion, there isn’t any upside within the share value. In truth, the federal government’s fairness funding (through dues conversion) within the firm has additionally gone into losses (on the present share value). If the administration can not deal with the corporate, it ought to contemplate promoting or surrendering it to the federal government,” Santosh Kumar Saraf, a retail shareholder of the corporate, mentioned throughout the assembly.
Saraf questioned aloud what would occur if the corporate defaulted even after the fundraiser. These days, the federal government has been exploring a decision on the telecom operator’s substantial dues. As of 31 March, Vodafone Concept’s whole authorities dues stood at round ₹2 trillion, together with ₹1.19 trillion in spectrum dues and ₹83,400 crore adjusted gross income (AGR) dues.
Mounting bills
Within the absence of any aid from the federal government, beginning 31 March 2026, Vodafone Concept must pay an annual instalment of over ₹18,000 crore for the subsequent six years in direction of AGR and spectrum dues to the federal government. The dues are underneath moratorium, which can expire in September. In 2025-26 itself, Vodafone Concept must pay ₹16,428 crore in direction of AGR dues and ₹2,539 crore in direction of deferred spectrum dues.
Going by the corporate’s share value efficiency, the Friday closing share value of ₹7.40 is over 38% decrease than the FPO itemizing value of ₹12 in April final yr. In truth, the federal government’s funding in Vodafone Concept by two fairness conversions at ₹10 a share has additionally fallen by 26% on the present share value. In August 2018, when Vodafone Group accomplished its merger with Concept, the corporate’s share value was ₹30.
“The corporate must give attention to rising its enterprise. Many small traders are caught within the firm for the final so a few years,” mentioned Redeppa Gunduluru, one other retail investor, who has expressed issues over the losses he incurred lately and the unstable share value.
Key Takeaways
- Retail traders expressed anger over Vodafone Concept’s plunging inventory value after the follow-on public provide and subscriber losses, with some calling for the corporate handy management over to the federal government.
- Vodafone Concept owes round ₹2 trillion to the federal government, with moratoriums ending quickly.
- The share value has fallen over 38% from the FPO value, and the federal government’s fairness, at ₹10/share, can be within the purple.
- Absence of Aditya Birla Group chairman at EGM upset shareholders.
“Vi’s continued subscriber losses and weaker information internet provides stay key issues. Regardless of potential acceleration in community investments, we consider regaining subscribers will stay a tall ask for Vi, provided that friends—with superior free money stream era and deeper pockets—can maintain buyer acquisition prices greater,” mentioned analysts at Motilal Oswal in a observe dated 2 June.
“Additional, with no aid up to now on AGR dues (repayments start March 26) and no breakthrough on the debt increase, we consider Vi is more likely to face an annual money shortfall of ₹20,000 crore and could also be unable to satisfy its capex steering of ₹50,000-55,000 crore over FY25-27,” the analysts mentioned.
Narender Chauhan from Uttar Pradesh, one other shareholder of the corporate, requested the administration in regards to the firm’s highway map within the subsequent 3-4 years, its plans for pan-India 5G protection, and readability on the satcom companies launch after its latest collaboration with US-based AST SpaceMobile on direct-to-device connectivity.
Dodging queries
In an change submitting on 30 Might, Vodafone Concept mentioned its board had permitted elevating one other ₹20,000 crore by a follow-on public providing, non-public placement, or different permissible mode. The corporate mentioned a capital elevating committee will consider and resolve on the potential route of fundraising. This fundraising approval comes at a time when the telecom operator can be trying to tie up ₹25,000 crore in financial institution debt to fund the capex for community enlargement.
When shareholders requested about the usage of the ₹20,000 crore proceeds, the corporate’s chief monetary officer Murthy G.V.A.S. mentioned, “The proceeds might be used for capital expenditure.” The administration, nonetheless, didn’t deal with the shareholders’ queries in regards to the firm’s survival and revival issues and the best way ahead.
Notably, for the reason that merger, Vodafone Concept has raised whole fairness of round ₹56,000 crore, out of which round ₹27,000 crore has been contributed by the promoters, the corporate advised the Supreme Courtroom in a latest plea to hunt waiver on AGR dues from the federal government. The plea, nonetheless, was rejected by the court docket.
Within the petition, the telecom firm had mentioned it might not be capable of function past the present fiscal yr with out financial institution funding, which stays elusive as lenders stay cautious of its dues value ₹83,000 crore linked to AGR.
On the shareholder questions, Ravinder Takkar, the corporate’s non-executive chairman, mentioned, “a lot of the questions have been associated to gadgets exterior the agenda gadgets (of the EGM).” Takkar, nonetheless, requested the corporate to be aware of a few of the ideas made by the shareholders.
Pinning its hopes
Vodafone Concept is ready to incur capital expenditure of ₹5,000-6,000 crore for the primary half of 2025-26 to boost its community and infrastructure. Nevertheless, its subsequent leg of spending can be depending on funds from banks, the corporate’s CEO, Akshaya Moondra, had mentioned in an earnings name on 2 June.
“I see no cause why the federal government ought to be constrained in any technique to provide aid…,” Moondra had mentioned.
Vodafone Concept is essentially the most extensively held inventory, with over 6 million retail shareholders (greater than the State Financial institution of India), in line with the corporate’s letter to the division of telecommunications on 17 April searching for additional help.
In Might final yr, Vodafone Concept mentioned it might incur a capital expenditure of ₹50,000-55,000 crore over the subsequent three years to increase its 4G community and launch its 5G service.
“Completion of ₹25,000 crore debt-raising is vital for executing Vi’s ₹50,000-55,000 crore capex programme. Greater authorities flexibility round AGR dues presents a ray of hope,” IIFL Capital mentioned in a observe on 2 June.
The retail traders additionally questioned the corporate’s administration in regards to the fall in subscriber base and whether or not there are any plans to merge with state-owned BSNL.
In an interview withMinton 23 April, Union communications minister Jyotiraditya Scindia mentioned there aren’t any plans to merge Vodafone Concept with BSNL. “I don’t suppose it’s essentially inefficient to have two competing companies. There are a number of verticals the place the federal government has competing companies. Additionally, there was no bodily money outgo on this (Vodafone Concept) conversion. What the federal government has retained is an upside, no draw back,” Scindia had mentioned.
As of 31 March, Vodafone Concept had 198.2 million cell subscribers. At the same time as Vodafone Concept has been dropping subscribers for a very long time now, the corporate’s subscriber churn charge has slowed down throughout the March quarter. In comparison with the lack of 5 million subscribers every within the September and December quarters, its subscriber churn slowed all the way down to 1.6 million within the fourth quarter.
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