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Indus open to Vodafone Idea paying dues in instalments

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In Short:

Indus Towers, a tower company in India, believes that Vodafone Idea will soon pay off its past dues of Rs 5,700 crore with new funding. VIL plans to raise Rs 45,000 crore through equity and debt and has already started clearing its dues to Indus Towers. Indus Towers expects to benefit from Vi’s network expansion plans, with potential growth in tower/tenancy CAGR and free cash flow.

Indus Towers expects Vodafone Idea to clear dues worth Rs 5,700 crore

Indus Towers, India’s leading tower company, anticipates that Vodafone Idea will soon pay off its entire past dues amounting to around Rs 5,700 crore, following the securing of funding by the latter. The payment is expected to be made either in one go or in multiple tranches.

Response from Indus Towers

Prachur Sah, Managing Director & CEO of Indus Towers, expressed optimism about Vodafone Idea’s fundraising plans and the impact it will have on Indus Towers. He stated, “We are pleased to see the positive developments on Vodafone Idea’s fundraise and expect that VIL will clear over-dues of Indus in its entirety.”

Addressing VIL’s plans for 5G rollout, Sah added, “We remain committed to supporting all our customers in their growth plans and are best positioned to do the same for VIL.”

Fundraising Plans of Vodafone Idea

Vodafone Idea is looking to raise around Rs 45,000 crore through a combination of equity and debt. The company plans to raise Rs 18,000 crore through a follow-on public offer (FPO) and another Rs 25,000 crore through debt. Additionally, the company has approved raising Rs 2,075 crore from a promoter entity through a preferential share issue.

Vodafone Idea has announced plans to commence 5G rollout in the next 6-9 months and aims to achieve 40% revenue coverage within 24-30 months. It will utilize Rs 5,720 crore for capital expenditure from the FPO funding.

Analysts at Jefferies mentioned in a research note that if Vi expands its network, Indus’s growth outlook will improve. Assuming all new tenancies are set up on its existing towers by FY26, Indus would deliver a tower/tenancy CAGR of 6%/7% over FY24-27, with a projected free cash flow (FCF) generation of Rs 20 per share in FY26.

Vodafone Idea has recently started to partially clear its large dues to Indus Towers, which has contributed to the tower company’s net profit in the December quarter.

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