India Ratings downgrades Vodafone Idea’s Rs 3,500 cr debt

15

New Delhi, Jan 24 | India Ratings and Research (Ind-Ra) has downgraded Vodafone Idea Ltd’s (VIL) Rs 3,500 crore long-term issuer rating to ‘BBB-‘ from ‘BBB’ while maintaining it on rating watch negative.

India Ratings said it continues to take a consolidated view of VIL and all of its subsidiaries while arriving at the ratings because of the close operational and strategic linkages among them.

In a statement, it said that the downgrade reflects the crystallisation of adjusted gross revenue (AGR) related liabilities for VIL post the Supreme Court’s adverse ruling on January 16, 2020, dismissing the review petition filed by telecom companies (telcos).

The SC ruling provides clarity on the AGR liabilities that are payable by VIL to the Department of Telecommunications (DoT), which was earlier contingent upon the outcome of the review petition.

The apex court has, however, agreed to hear the modification application filed by telcos next week.

In this application, the telcos have requested modification in the original Supreme Court order dated October 24, 2019, to decide upon the payment schedule for AGR liabilities and any other relief measures with DoT.

Furthermore, the DoT has decided not to take any coercive action against telcos if they fail to comply with the SC’s October 24 order.

India Ratings has said that a deterioration in medium-term liquidity is likely. VIL has classified Rs 102 billion from non-current borrowing to current maturity of long-term borrowing in Q4FY19 for not meeting certain covenants in the financing documents.

“So far, there is a lack of clarity on whether the banks have waived off the covenants. Under the current situation, the risk of acceleration of payment is high, given the company’s weak liquidity situation and concern on its going concern status (in the absence of government support). Any payment acceleration on VIL’s financial liability will have a negative impact on the rating,” the rating agency said.

As of March 31, 2019, Aditya Birla Group (ABG) held a 26 per cent stake in VIL, predominantly through Grasim Industries Ltd (11.6 per cent,), Hindalco Industries Ltd (2.6 per cent), Birla TMT Holdings Private Ltd and IGH Holdings Private Ltd (about 4 per cent each) and other ABG investment entities. Vodafone Plc held a 45.3 per cent stake in VIL, as of March 31, 2019.

Since January 2018, around Rs 483 billion has been infused in the erstwhile Idea Cellular Ltd, erstwhile Vodafone India Ltd and VIL, through capital infusion and/or asset sale.

The most recent capital infusion has been the promoter’s contribution of Rs 179 billion in the rights issue. Till India Ratings’ last review in November 2019, India Ratings was factoring in likely support from ABG to VIL, but factored in weakening of support from Vodafone Plc.

However, continuation of support from the ABG remains contingent on financial viability of the business, which in the current context looks challenging to India Ratings.

Vodafone Plc has ring-fenced its India business to two assets – its 42 per cent stake in Indus Towers and its 45.3 per cent stake in VIL. Vodafone Plc funded its contribution of Rs 110 billion towards rights issue indirectly through a loan secured against its Indian assets. Furthermore, it aims to utilise proceeds from the sale of its 42 per cent stake in Indus Towers (about Rs 192 billion as per Ind-Ra’s estimates) to repay its contribution of Rs 110 billion, thereby significantly limiting Vodafone Plc’s ability to support VIL beyond FY21-1HFY22.

Assuming Vodafone Plc monetises its 42 per cent stake in Indus Tower for Rs 192 billion cash and utilises the proceeds for repayment of Rs 110 billion of loan, the total funding flexibility with Vodafone Plc to support VIL would be about Rs 82 billion.

The ratings action also mentions the continued weak operational performance. VIL’s subscriber market share (visitor location register) declined to 30.5 per cent in November 2019, as against 36 per cent in March 2019.

Its revenue market share declined to about 27.2 per cent in 2QFY20, as against about 32 per cent in 4QFY19.

Reliance Jio Incomm Ltd has continued to remain aggressive in subscriber acquisition and has become the largest player in terms of subscribers and revenue.

Competition risk still persists in the sector which may put VIL’s market share at continued risk. India Ratings believes the subscriber base is unlikely to show a meaningful recovery in the near-to-medium term, given the sustained competitive pressures, it said.

Source: IANS

Sponsors Posts

Meet Gurmeet singh Shunty A New Superhero With Turban

Meet Gurmeet singh Shunty A New Superhero With Turban

In the last year, the whole world was struck by a large pandemic. The year 2020 came with a pandemic called coronavirus which affected the whole world badly. Coronavirus in India resulted in great downfalls in health, economy, unemployment, and so on. Lakhs of People Lost their lives, jobs, and their loved ones. The whole year was very disturbing for each section of society. Coronavirus in India resulted in great downfalls of health, economy, unemployment, and so on. The whole year passed with a large Tension and fear for all the peoples. In the hard times of coronavirus spread, a lot of peoples came out and helped the person in need and It is one of the very few positive effects of Covid-19.

During the blast of the Covid-19 pandemic in the world our volunteers have demonstrated an exceptional display of solidarity across the world and our society. However, this is also the year which witnessed the world coming together to fight coronavirus. The year with its share of trials and tribulations threw up some exemplary work being done by organisations and individuals in this difficult time as the pandemic spread, a new breed of warriors with an indomitable spirit stood up bravely against it to take on the challenge head on.

In the hard times of lockdown, a lot of peoples came out and helped the person in need and It helped the society to live again with a hope of being helped in bad time. During the Large spread of the Covid-19 pandemic in the world our leaders of the society have demonstrated an exceptional display of solidarity across the world and in our society too. They did a Great work in every aspect needed at that time, from Responding to calls for help from their local communities to help them by going on roads, they are everyday heroes who came as a preserver for them.

They do wear masks and face shields to protect themselves and spread awareness in the society to follow each rule and regulation. We can say that there are many things which has spread faster than the coronavirus during the pandemic, it has been the noble works, fearless steps, selfless service and recognition of Gurmeet Ji and his supporters who continued to work day and night to save other’s lives. He also set up camps and volunteer help alongside highways and by roadsides, just to provide relief and support the migrant workers going back to their places all over India.

Among the Great hidden heroes who worked day and night to fight during lockdown, one such person is Gurmeet Singh shunty ji, who is the ex general secretary of delhi sikh gurudwara committee.Being at such great post he always learned to do sewa and that teaching has been always with him which dedicated him towards the society to work for the people of his own nation and humanity. Gurmeet Ji worked 24×7 , without caring of himself. He is the person who have been stepping in to help during the pandemic and they all have been a portrait of selflessness and optimism to this society.

Gurmeet Ji believe that our selfless acts or Sewa in any form must be done to save humanity, Sewa require a true heart and helping nature which will bring both helper and victim happy. During the tough times of coronavirus, Gurmeet Ji and his volunteers came out of their comfort zones to help lakhs of migrants workers who wanted to go back to their hometown during the COVID-19 lockdown. So in that  time  when the world undergoes such vast pandemics which affects all the person Whether it’s a small or large donation of money, resource or humanity, each things matter.

During the tough times of coronavirus, when everyone was thinking of themselves First, Gurmeet Ji and his volunteers came out of their comfort zones to help lakhs of migrants workers who wanted to go back to their hometown during the COVID-19 lockdown.Despite of being older in age,He did not let himself to be inside house and watch news of the suffering surroundings but he helped as many people as he could during the crisis by arranging food, buses, trains and most importantly by giving a warmth of love and care.He created a large team just to help the peoples in problem and inspired many others to do so. We can say that there are many things which has spread faster than the coronavirus during the pandemic, it has been the noble works, fearless steps, selfless service and recognition of Gurmeet Ji and his supporters who continued to work day and night to save other’s lives by risking his own and his family’s health. They didn’t even meet their family members and specially children for months,for their Safety and some even spend nights in their vehicles and outside home to assure that the virus doesn’t spread further to their loved ones and family members. Government took various steps to save our nation from the bad impacts of corona spread and one of them was lockdown. Lockdown was done to stop the spread the corona in nation but it resulted in great losses.when lots of People were on Roads, lots have nothing to eat and some were not having anyone for their care, without any money and food thousands of People covered thousands of kms on their feets, with their families and whatever they had earned in their lifetime, there comes some unknown super heroes of our society who helped them selflessly.

Their faces get rashed by the mask marks, they continuously took medicines to save themselves and others too. They maintain distance from their own members in order to help other persons to reach their destinations. In the bad times we get to know about many such People and These are the people who are helping in restoring humanity’s faith by coming up with novel ideas and their great works which inspires whole society to come ahead. That was the time when a number of labourers, their children and other family members were forced to return back to their places but Gurmeet Ji risked his life to save theirs.He started his service with providing cooked food as langar sewa and later switched to dry rations too, with the objective that people in need should not go to sleep on an empty stomach and they must not loose their hearts and continue their journey with less problems. It’s very hard to find such person in this crucial time when everyone put themselves first but Gurmeet Ji believe in his teachings and said “our panth has taught us the lesson of jan sewa, and we will continue this legacy till our last breathe.”

All the people who helped any of the person in need will be in their memory for forever as they made them believe on brotherhood and humanity in such a Crisis. It is beleived that in when some person get trapped in trouble even your shadow leave your side but the persons like Gurmeet Ji taught each and every person of society that we Must help each other to maintain love and care in society which will make then believe in the existence of god. If God has given you the power and resources to help others you must move forward as your one step can change anybody’s life.Gurmeet ji said that “our great sangat give us the teachings of sharing whatever less or more you have and These teachings which I started learning since my childhood inspired me to help my brothers and sisters of this society. ” He further added that he feel so happy and blessed that he could be the reason of anyone’s little smile. He requested everyone that even Your small step can save someone’s life and make them beleive into humanity and brotherhood.He started his service with providing cooked food as langar sewa and later

 

switched to dry rations too, with the objective that people in need should not go to sleep on an empty stomach and they must not loose their hearts and continue their journey with less problems.

He also set up camps and volunteer help alongside highways and by roadsides, just to provide relief and support the migrant workers going back to their places in UP, Bihar and even farther. It was clearly seen during the pandemic when thousands of people were going towards their villages with their small children and had nothing to feed them, at that time Gurmeet Ji provided them food ,water and other necessary items which brought  beautiful smiles and tears of happiness in their eyes as they never expected that in this crucial time there could be someone who will act as a survival medium for them.

At that time many warriors came in the front line to help the society. Despite being senior in age Gurmeet singh Shunty ji, was the Person who came out of the house when everyone was locked. He was standing in the crowd to help them reach their houses and made  very hard decisions at the right time.

We need to Recognise these Heroes so that they could work more and more for the welfare of this society. We need to Recognise these unsung Heroes so that they could work more and more for this society as “this society is all about give and take.”  They have given millions of smiles and its our time.They must be appreciated for their noble works to boost such works of brotherhood. They have given millions of smiles and its our time to pay them back.

LEAVE A REPLY

Please enter your comment!
Please enter your name here