Vodafone Thought (Vi) cleared financial institution dues fairly quick in FY24. Vi’s debt from banks and monetary establishments stood at Rs 111.3 billion in This fall FY23. In FY24, the telco diminished it by Rs 70.9 billion, decreasing the entire debt within the phase to Rs 40.4 billion. Be aware that that is simply the debt from banks and monetary establishments. The debt in direction of the federal government stood at Rs 2,034.3 billion (to place into context for simpler understanding, that’s greater than Rs 2 lakh crore).
The cash-strapped telco does not wish to default on paying off banks and monetary establishments’ debt for 2 causes. The primary purpose is as a result of it desires to lift extra debt from them and keep away from late cost curiosity which will likely be an added burden. The second purpose is that banks and monetary establishments can drag Vi to the chapter court docket.
Learn Extra – Vodafone Thought to Begin Rolling out 5G after Six Months: CEO
Because of the heavy deal with dues funds, Vi cannot use that cash for capex (capital expenditure) on cell networks. Nonetheless, with the current fundraising of Rs 20,000 crore (in complete from a promoter group firm and FPO), the telco is about to develop the 4G capability and protection to present customers a greater expertise.
The money and financial institution stability of Vi stood at Rs 1.7 billion on the finish of March 31, 2024, which is about Rs 170 crore. The telco has many commitments in direction of distributors, tower corporations, authorities, and banks to repay dues. In the course of the traders’ name, Vi stated that it’ll use the cash it earns via prospects to repay dues and the cash raised via fairness for capital expenditure. That is the technique Vi desires to make use of to make sure that it will possibly hold going within the long-run. The telco’s revenues have not grown a lot during the last yr, and its EBITDA share has additionally largely stayed flat.
Learn M0re – Vodafone Thought Struggled to Add 4G Subscribers in FY24
Vi wants to chop prices and enhance margins within the short-term to slim losses. On the similar time, the telco is eyeing to lift tariffs within the close to future to spice up ARPU (common income per person) and improve general revenues.
