InvestorQ : With the Supreme ordering full payment of AGR dues by Bharti and Vodafone Idea, how does it impact the financials of Bharti and Vodafone Idea?
Chandralekha Desai made post

With the Supreme ordering full payment of AGR dues by Bharti and Vodafone Idea, how does it impact the financials of Bharti and Vodafone Idea?

Answer
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Mitali Bhutta answered.
3 months ago


The non-telecom PSUs may have been exempted but Bharti and Vodafone really have a problem on hand. Let us consider the case of Bharti first, which may have a relatively smoother ride. It may be recollected that Bharti Airtel has already paid Rs.18,000 crore of AGR dues and furnished bank guarantees for another Rs.10,000 crore.

Of course, in spite of the comfortable situation, Bharti has asked for another 20 years to pay the remaining dues but that will depend on the decision of the DOT and the government. However, even if that time period is shortened, it may not really hurt Bharti Airtel too much. That is because Bharti has already monetized chunks of its assets in Africa and plans to shortly monetize its tower assets too.

However, idea may be a tad more complicated and tighter too. Vodafone Idea has paid Rs.6900 crore in AGR dues and has the cash to pay up another Rs.6900 crore. But that would still leave a shortfall of Rs.40,000 crore for Vodafone Idea to fill up. That looks tough considering present cash flows and could push Vodafone into a financial crisis if DOT insists.