Vodafone Idea jumps on promoter-led capital infusion, AGR relief

Vodafone Idea surged 6.41% to Rs 11.45 after the company announced a promoter-led capital infusion aimed at strengthening its balance sheet and improving cash flow visibility.

In an exchange filing, Vodafone Idea said it has entered into an amendment agreement with the Vodafone Group to the original implementation agreement dated 20 March 2017. The amendment formalises a commitment by promoters to infuse about Rs 5,836 crore into the company.

Vodafone Idea had earlier recognised Rs 8,369 crore as receivable from Vodafone Group promoters under the contingent liability adjustment mechanism (CLAM), which represents the maximum cap for such payments. After adjusting Rs 1,975 crore already paid, the balance CLAM amount stood at Rs 6,394 crore. Following the amended terms, about Rs 5,836 crore is now receivable by the company.

 

Under the revised structure, Vodafone Group promoters will release Rs 2,307 crore in cash over the next 12 months, subject to agreed conditions. In addition, 3.28 billion equity shares of Vodafone Idea have been earmarked by certain Vodafone Group shareholders for a period of five years. Proceeds from the sale of these shares, at the companys direction, will accrue to Vodafone Idea. As of December 31, the market value of the earmarked shares stood at about Rs 3,529 crore, based on the NSE closing price of Rs 10.76 per share.

The company said the amended arrangement strengthens its financial framework and improves predictability of future cash flows. It also clarified that receipt of the CLAM amount does not require any prior payment to the Department of Telecommunications.

The amendment represents a modification to an existing related-party transaction with promoter group entities and does not involve any issuance of shares or loan arrangements, the company said.

Separately, the Union Cabinet on Tuesday approved a relief package for Vodafone Idea under which its adjusted gross revenue dues have been frozen at about Rs 87,695 crore as of December 31, with repayment rescheduled over a 10-year period from FY32 to FY41, subject to reassessment of the frozen amount by the Department of Telecommunications under deduction-verification guidelines, with the final determination binding on both parties. ​

Under this revised framework, AGR dues for FY18 and FY19 will continue to be paid over the FY26-FY31 period and will not be part of the frozen bucket, while a government-appointed committee and DoT audits will drive the eventual payable figure, which is intended to balance recovery of dues with giving the company more runway to revive operations and attract investment. ​

India's third-largest telecom operator, Vodafone Idea is backed by Aditya Birla Group and Vodafone Group. The company holds 5G spectrum in 17 circles and mmWave spectrum in 16 circles, offering services across 2G, 4G and expanding 5G networks.

The telco reported a consolidated net loss of Rs 5,524 crore in Q2 FY26, narrowing from a net loss of Rs 7,175.90 crore in the same quarter last year. Net sales increased 2.3% to Rs 11,169.60 crore in Q2 FY26 compared with Rs 10,918.20 crore posted in same quarter last year.

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