‘Tough times don’t last’: Birla says Vodafone Idea has navigated one of its toughest periods

NEW DELHI: Vodafone Idea has emerged from one of the most difficult phases in its history and the telecom operator has sought shareholder approval for a new deal, non-executive chairman Kumar Mangalam Birla said on Thursday. ₹4,730 crore promoter funding infusion.

Addressing shareholders at the extraordinary general meeting (EGM), Birla sought to project confidence in the company’s revival while acknowledging that challenges remain. This comes at a time when Vodafone Idea continues to pursue its long-awaited bank financing and manage a broad spectrum of payment obligations.

“…in my annual reviews, I said that tough times do not last, tough companies do. These words resonate more strongly in our company today,” Birla said in his first EGM since taking over as non-executive chairman last month. “I think we will have good times ahead… there will continue to be some challenges, but I still believe we are at a turning point.”

EGM convened to obtain shareholders’ approval. ₹The investment of ₹4,730 crore by the promoter group entity Suryaja Investments Pte Ltd was realized through the issuance of 4.3 billion convertible warrants. ₹11 each. Warrants will allow staggered backer financing over 18 months at 25% or ₹1,182 crore, to be paid in advance.

Answering shareholders’ questions, Birla said: ₹1.730 billion of the revenues will be used for capital expenditures, the rest ₹3,000 crore will go towards debt reduction.

He said that with full conversion of warrants, Aditya Birla Group’s shares will increase from 9.6% to around 13%. The total stake of the two promoter groups (Aditya Birla Group and Vodafone Plc) will rise to around 28.5%.

The state’s share in the company currently stands at 49%. Upon full conversion of the warrants, this stake will drop to approximately 47%, leaving room for future conversion of the company’s dues into government equity.

The promoter financing is seen by analysts as a signal of support to lenders at a time when Vodafone Idea is struggling to secure the bank financing required for its turnaround. However, ₹The financing amount of ₹ 4,730 crore is not considered large enough to solve the structural difficulties of the company, Mint he reported last month, quoting analysts.

Many retail shareholders at the meeting welcomed Birla’s return as chairman and expressed optimism that his leadership could help the company recover and support its share price.

Despite this, Birla warned that the recovery was a work in progress. “Across operations, customer service and network expansion, the company pursues its priorities with discipline and purpose.”

Shares of Vodafone Idea closed 2.5% higher on Thursday. ₹14.23 per person at the National Stock Exchange.

Balance

The company has achieved significant relief in adjusted gross revenue (AGR) dues. The Center froze Vodafone Idea’s AGR dues on December 31. ₹87,695 crore. He reduced these dues in April ₹23,600 crore ₹64,046 crore after recalculation and most of the payments were postponed for 10 years; repayments were scheduled between FY36 and FY41.

Operationally, Vodafone Idea reported a subscriber base of 192.8 million in the January-March quarter (QFY26) and managed to stem subscriber losses compared to the previous quarter.

“The benefits of sustainable investments in network infrastructure and rollout are now increasingly visible, reflecting stronger operational performance and improving customer service,” Birla said, adding that Vodafone Idea operates in one of the most important telecommunications markets in the world and serves under digitalization in India, which has a population of 1.4 billion.

“Reconstruction work has begun, your company now looks to the future with confidence,” he said.

Despite the AGR cut, analysts continue to flag the company’s deferred spectrum liabilities. ₹1.27 trillion at the end of March. Vodafone Idea faces spectrum payment obligations of approx. ₹49,000 crore in the next three years ₹7,000 crore in the first year, ₹Second and around 15,000 crore ₹27,000 crore in the third.

Last month, during its earnings call, Vodafone Idea said: ₹1.08 trillion over the next three years to finance its comeback. The financing will come from tripling EBITDA, the company said. ₹60,000 crore between FY 27-29, increase ₹35,000 crore and collateral through bank debt and recurring credit facility. ₹10,000 crore and expected income tax refunds from the recent deal with Vodafone Plc.