According to Vodafone Idea Limited (Vi), Care Ratings has revised its rating assigned to the long-term bank facilities to ‘CARE BB+’ from ‘CARE B+’ with stable outlook. Care Ratings has also upgraded the company’s short-term bank facilities to CARE A4+ from CARE A4.
According to the agency, the revision in rating assigned to long-term and short-term bank facilities of Vi factors in large fund raise through follow-on public offer (FPO) worth Rs 180 billion from institutional and retail investors apart from preferential issuance of Rs 20.75 billion to one of the promoters, Aditya Birla Group (ABG).
Care Ratings also take cognisance of experienced management team, pan-India telecom presence with high brand recognition supported by a stable outlook for the Indian telecommunications industry, strong promoter groups, including ABG and the Vodafone Group Plc assisting the entity and substantial shareholding (23.77 per cent as on 31 May 2024) of the government through the Department of Investment and Public Asset Management (DIPAM).
Further, Ratings strengths remain underpinned by Vi’s deteriorated financial and business risk profile, where, tangible net worth has eroded, significant exposure to operational creditors, and modest revenue growth of 1.1 per cent in the fiscal year 2023-24 (FY24) due to constantly declining subscriber base with delay in raising funds against envisaged timelines.
