Few Thing’s To know about Vodafone Idea Failure

The big question is, does Vodafone Idea fail? The company has been losing customers for some time. However, according to the Telecommunications Regulatory Authority of India, VIL had 277.62 million subscribers at the end of May. The company also has thousands of employees. Great uncertainty will haunt them if the business is not saved. The industry, once home to more than a dozen operators, has been reduced to just three, with the exception of state-owned BSNL. If VIL collapses, the absorption capacity of short-term subscribers and employees will be a major instability. Vodafone Idea, which established its companies in 2018, is expected to pay out more than for AGR contributions. But now there is a real possibility that the government will lose all this and add a little more to other debts such as past due universal payments. According to various estimates, VIL owes the government about Rs 1,51.6 lakh crore. It has for the annual spectrum payment and Rs 8,400 for AGR fees coming in March, April 2022. However, with a loss of Rs 44,233 for the year ending March 2021, the company is unable to pay its debts, at Rs 1.86 lakh (including accrued but undue interest and AGR debt) as of March 31.VIL has had difficulty managing debt, which is 10 times net debt in a valuation environment where taxes are Now the promoters have refused to put more equity in the business. With K. Piyush Pandey, senior analyst at Yes Securities, said that with Birla’s departure as chairman and the company’s current financial situation, it will be difficult to raise capital from other institutional investors. According to the brokerage firm, the country’s largest state bank, State Bank of India, is the bank with the most exposure to ILV in terms of value. Another state-owned lender, the Punjab National Bank, makes a profit of Rs 3,000 crore. Several private banks, including Yes Bank, IDFC First Bank, IndusInd Bank, Axis Bank, ICICI Bank and HDFC Bank, are contacting VIL. For larger lenders like SBI, as a percentage of the loan portfolio, the ILV is only 0.5%. However, it is more worrisome for smaller lenders such as IDFC First Bank, Yes Bank and IndusInd Bank. According to Nomura, the absolute exposures of the three banks to VIL are Rs 3,240 crore, Rs 4,000 crore and Rs 3,500 respectively, as a percentage of the loan portfolio they are 3%, 2, respectively. 4% and 1.7%. The ILV risk ratio is 16.1% equity for IDFC First Bank, 12% for Yes Bank and 7.9% for IndusInd Bank. \u201cVI has approximately Rs 92,300 crore of deferred payment obligations, for which we believe banks will only issue bank guarantees for the short-term debt portion. The total risk of bank failure is Rs 23,700 crore. In the event of default, only existing defaults are converted to receivables and then treated as bad debts, Nomura analysts said. With developers reluctant to pour in more money and outside funding still elusive, the government may not have many options to bail out the struggling telecommunications company. The government is reportedly working on a bailout of the sector. It can certainly bring some relief. However, there has been no official government response to Birla’s letter, which was reportedly written in June. Some experts also believe the government should take over VIL and merge with BSNL. It is known that the Ministry of Telecommunications held a meeting with senior bank officials last Friday to discuss the issue of VIL. While VIL has not defaulted, some lenders may have already started making arrangements to prepare for such a situation. The government can convert debt into equity. It can help banks as well as governments. However, it would also make the banks major shareholders of the losing telecom company. For several years, the Narendra Modi government vigorously promoted the “Digital India” initiative. The telecommunications sector is crucial for this to succeed and grow. The collapse of a telecommunications company will obviously stand in the way. India’s telecommunications sector is one of the fastest growing and still has great potential for growth as internet penetration is still low compared to other markets and there are many people in the country behind it. ‘India.

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