CRISIL has downgraded the rating of Vodafone Idea’s non-convertible debentures (NCDs) of Rs 35 billion from ‘CRISIL A+/Negative’ to ‘CRISIL A/Negative’.
As per CRISIL, the telecom operator has seen deterioration in the business and financial risk profile over the medium-term due to low profitability than expected, resulting into the rating downgradation. Further the rating agency added that Vodafone Idea’s net debt may continue to exceed Rs 1 trillion by the end of March 31, 2020, in spite of company’s deleveraging plans.
Besides, the plan of selling its fibre assets, the telco may monetise its 11.15 per cent stake in Indus Towers, post completion of the Bharti Infratel and Indus Towers merger. The proceeds from monetising of Indus Towers is estimated to be around Rs 56.3 billion as on June 30, 2019.
According to the annual report of Vodafone Idea in FY19 the company is making significant investments in order to expand its coverage and capacity of 4G network targeting a reach of 80 per cent 4G population by March 2020.