India’s third largest telecom service provider, Vodafone Idea (Vi) may lose access to towers from November if it fails to repay dues to Indus Towers. In a big jolt to Vodafone Idea, the latter has issued a stern warning. Over 25 crore users could be affected if Vi fails to pay the dues.
Indus Towers has asked Vodafone Idea to clear all past dues at the earliest and pay 80 per cent of its monthly dues immediately. Further, it has asked the company to clear 100 per cent of its monthly dues on time, without which access to the tower network would be barred.
This decision came after the company’s board met and discussed their mounting receivables. These were mainly due to payment delays by Vodafone Idea, which owes more than ₹ 7,000 crores to Indus Towers. Vi owes an additional ₹ 3,000 crores to American Tower Co (ATC), which is planning to take similar steps.
Indus Towers logged a 66.3 per cent YoY (year-on-year) decline in its Jun quarter net profit to ₹ 477.3 crores. This is largely attributed to heavy receivables, mainly delayed payments by Vodafone Idea.
On the other hand, the cash-strapped telco is looking to raise ₹ 20,000 crores. It might take more debt from lenders and equity. The trade payables of the telco surged almost 13.6 per cent sequentially to ₹ 14,956.2 crores in the June quarter. These include dues to tower firms, network vendors and other suppliers.
Vodafone Idea’s shares have been wealth destroyers in the past. The counter has yielded a negative return of 80 per cent in the past five years and a negative 42 per cent as per year-to-date data. It reached a 52-week high of ₹ 16.79 on October 10, 2021, and a 52-week low of ₹ 7.75 in June this year.
At the end of the June quarter, Indus Towers was operating about 1,86,474 towers, with Vi being one of its main customers. Interestingly, the shareholding pattern of the company shows that Bharti Airtel owns 47.76 per cent in Indus towers and Vodafone Group Plc holds 21.05 per cent.
Written by Simran Bafna
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
To stay updated with the Latest Stock Market news, download our app here!
For editorial purposes, contact email@example.com
Start Your Financial Learning Journey
Want to learn Stock Market and other Financial Products? Make sure to check out, FinGrad, the learning initiative by Trade Brains. Click here to Register today to Start your 3-Day FREE Trail. And do not miss out on the Introductory Offer!!