The tide seems to be turning for Vodafone Idea Limited (Vi), which has been struggling to remain afloat in the market. First, the government’s telecom reform package brought a ray of hope as Vi opted for a four-year deferment of both spectrum and adjusted gross revenue (AGR) dues in October 2021.

Then, in January 2022, the company approved the upfront conversion of the full amount of interest arising due to this deferment into government equity, making the government the largest shareholder in Vi with a 35.8 per cent stake.

While these measures are expected to give short-term liquidity to the struggling telco, industry analysts believe Vi is in dire need of a large funds infusion to solve its woes in the long term and bring the company out of the woods. Although Vi had been trying to secure fresh investments from external investors, none of the plans seem to have worked out.

In this situation, its promoter, the UK-based Vodafone Group has come to Vi’s rescue. The Vodafone Group has raised Rs 14.43 billion by selling a 2.4 per cent stake in Indus To­wers Limited through a block deal to unnamed investors. Further, the Vodafone Gro­up has sold its 4.7 per cent equity interest in Indus Towers to Bharti Airtel for an undisclosed amount.

As per the Vodafone Group, the funds raised through these deals will be infused into Vi. In fact, the Airtel deal has been agreed to on the principal condition that the Vodafone Group will induct the amount paid by Airtel as fresh equity in Vi and simultaneously remit it to Indus Towers to clear Vi’s outstanding dues.

Vi’s board is scheduled to meet on March 3, 2022 to discuss fund-raising options. As per a regulatory filing, the board will consider and evaluate any and all proposals for raising funds in one or more tranches by way of preferential allotment, private placement (including qualified institution placement), or through any other permissible mode.

All these initiatives point towards the likelihood of a possible revival for Vi. However, its future will depend on its ability to pare debt while making fresh investments in 4G expansion and 5G roll-out.