Vodafone Idea Shares In 2023: Fund raise remains elusive with no clarity on 5G timelines

Although the management has repeatedly reiterated that fundraising talks have gathered pace, there is no clarity on when the promoter fund infusion or any external fundraising is likely to materialise.

With regards to its 5G rollout, the company's management said that it is in talks with vendors for the same, adding that a significant expansion of the 4G coverage and the 5G rollout will happen after the funding is tied up.

At the India Mobile Congress this year, Aditya Birla Group Chairman Kumar Mangalam Birla said the company will make "significant investments" over the next few quarters for the 5G rollout. However, he did not specify a timeline for the rollout.

There is still no clarity on the 5G rollout from the company. At the same time, competitors like Reliance Jio and Bharti Airtel have nearly completed their respective Pan-India rollout of their services.

In September, the telecom operator made a payment of ₹1,701 crore, including interest, to the Department of Telecom (DoT) concerning the 2022 spectrum auction instalment.

The company had proposed to pay the instalment of nearly ₹1,680 crore to the DoT by availing a grace period of 30 days with interest in August.

In late August, Vodafone Idea, along with ATC, had agreed to extend the period of redemption of 8,000 Optionally Convertible Debentures.

Vodafone Idea's shareholders had approved the preferential issue to raise up to ₹1,600 crore through Optionally Convertible Debentures through vendor American Tower Corp (ATC).

Vodafone Idea's failure to meet its contractual payments significantly affected companies like Indus Towers, whose MD & CEO Prachur Sah wrote to the telecom regulator that the non-payment of dues had severely impacted the company's cash flow.

The letter, accessed by CNBC-TV18, also highlighted that due to Vodafone Idea's inability to make payments, Indus Towers couldn't declare dividends to its shareholders for the first time since its listing. As of September 30, 2023, Vodafone Idea owed ₹7,864.5 crore to Indus Towers.

PD Vaghela, the then outgoing Chairman of the Telecom Regulatory Authority Of India (TRAI), in an exclusive interaction with CNBC-TV18, had said that he is concerned about the Vodafone Idea not being able to roll out 5G services.

Despite the 85% surge in 2023, no analyst that tracks Vodafone Idea has a "buy" recommendation on the stock. 13 out of 15 analysts have a "sell" rating, while the other two have a "neutral" view.

Brokerage firm Deutsche Bank has the lowest target on the street for Vodafone Idea at ₹1.5 per share.