Vodafone Idea reports Rs 43,474 cr negative net worth as of Sept 2020


Kolkata: (Vi) had a negative net worth of Rs 43,474.70 crore at end-September, 2020, while Reliance Jio and Bharti ’s net worth stood at Rs 1,79,617 crore and Rs 71,303.1 crore respectively as of end-December 2020, according to ownership-related submissions filed by the three private telecom carriers while applying for the upcoming 4G spectrum sale, starting March 1.

Loss-making Vodafone idea’s shares closed down 2.8% at Rs12.54 on the BSE Friday, while the Airtel stock ended 2% lower at Rs586.55. Reliance Jio isn’t listed.

Vodafone Idea’s networth is of September as it is yet to report October-December financial results, which is due Saturday, while its rivals have already reported their fiscal third quarter results.

Bidders are required to show a net worth of Rs 100 crore per service area in which they want to submit bids, although this requirement is not applicable in the case of existing licensees, according to the Department of Telecommunications’ Notice Inviting Applications – the main auction document containing all rules — for the upcoming spectrum sale.

Provisioning for statutory dues and mounting losses have driven Vi’s net worth to negative, say analysts. Vi needs cash to ramp up its 4G network to counter competition from Jio and Airtel and also to clear its backlog of Rs 50,400 crore adjusted gross revenue (AGR) dues in 10 annual instalments.

In fact, ET had reported that Vodafone Idea had asked the telecom department to clarify if it can be exempted from stating its net worth when applying to bid for 4G spectrum in the upcoming auction.

Earlier, this week, Jio, Airtel and Vi filed applications with DoT to participate in the 4G spectrum sale. Over 2300 units of airwaves across seven bands – from 700 MHz to 2500 MHz – valued at Rs 3.92 lakh-crore at the base price will be up for sale.

Jio is believed to have deposited earnest money of nearly Rs 10,000 crore, which would give it the option to buy 4G spectrum worth Rs 50,000-70,000 crore, while Airtel is believed to have deposited around Rs 3,000 crore, which would allow it to buy 4G airwaves worth Rs 15,000-25,000 crore, industry executives aware of the matter said. Vi’, financially the weakest, is said to have put in a modest Rs 475 crore, would enable it to buy spectrum worth only Rs 2,400—3325 crore in some bands and some circles.

The EMDs are part of the applications that the three telcos have filed to participate in the airwaves sale, and the quantum of EMD reflects a telco’s bidding strategy and ambitions.

Jio’s high earnest money deposit, typically, underlines its need to renew expiring airwaves in the 800 Mhz band and add spectrum to cater to rising data consumption. It is likely to be the most aggressive buyer, followed by Airtel, with Vi expected to show only marginal interest.

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