Vodafone Idea reportedly wants the government to release ₹15,000 crore bank guarantees ahead of its fundraising plan

• Vodafone Idea has reportedly reached out to the Department of Telecom to release bank guarantees worth ₹15,000 crore.
• The bank guarantees were given to the government with respect to the adjusted gross revenue (AGR) and spectrum dues worth ₹50,339 crore.
• With the telco opting for the four-year deferment of AGR dues, it now believes there’s no need for the DoT to hold on to those bank guarantees.
• This is crucial for the telco as its board meets on March 3 to discuss fundraising options.

Vodafone Idea has reportedly asked the Department of Telecom to release ₹15,000 crore in bank guarantees as the telco’s board of directors meets on March 3 to discuss fundraising plans.

According to a report by ET Telecom, Vodafone Idea’s argument is now that the adjusted gross revenue (AGR) and spectrum dues have been deferred by four years, and the government has the option to convert this into equity, there is no need to hold up the bank guarantees for the same dues.

Shares of Vodafone Idea were up by 2% as of 9:30 a.m., on Wednesday.


At the moment, the Department of Telecom reportedly holds ₹15,000 crore in bank guarantees, against Vodafone Idea’s AGR and spectrum dues worth ₹50,339 crore.

“Vodafone [Idea] has expressed the need to release bank guarantees since the AGR dues themselves have been deferred by four years,” the ET report said, quoting an unnamed government official.

$IDEA.NSE Vodafone Continues it’s weak performance:Vodafone’s Q3 numbers on YoY basis is anything but positive for the company. 1. Its subscriber base declined to 24.72 crore from 26.98 crore. 2. Its Q3FY22 consolidated revenue fell-10.8% on YoY basis to ₹9,717cr from ₹10,894 3. EBITDA declined -11.0% YoY basis ₹3,817cr from ₹4,286 cr, due to increase in network & roaming charges, license and spectrum payments and higher marketing spends during the quarter. 4. Adj. PAT was down 20% from (₹6,229cr) to (₹7,218cr)Positives- Deferral of AGR and spectrum dues along with the move to convert Debt to equity should aid deleveraging efforts for the company. Company’s plans to increase prices in the near-term should aid ARPU, However, Vodafone IDEA needs to work on increasing net additions and reducing churn rate of existing base.Till then investors should remain cautious!

— (@chartmojo) March 02, 2022

Apart from this, the telco also wants the government to freeze the date of calculation of AGR dues on the date of the Supreme Court’s judgement in the matter.

Business Insider has written to Vodafone Idea for a statement in this regard. We will update the story if and when we receive a response.

Why is this important for Vodafone Idea?

The request to release ₹15,000 crore bank guarantees will free up some pressure on Vodafone Idea’s balance sheet, which is racing to get the crucial fundraising from its potential investors.

Earlier reports had suggested that the company’s British parent – Vodafone Group Plc., – is paring its stake in Indus Towers, to infuse funds in Vodafone Idea. While Vodafone has sold 7.1% stake in the tower company, there have been no other developments with regards to it infusing funds in Vodafone Idea, so far.

Now, Vodafone Idea’s board of directors is scheduled to meet tomorrow, March 3, to discuss fundraising options on the table.

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