Moondra said on Monday also that the one promoter that had committed to provide financial support of up to Rs 2,000 crore was yet to infuse the money, though he clarified that the equity-linked funding it was in discussions for was not contingent on promoter infusion or vice versa.
In another significant development, the carrier reported an addition in post-paid users for the first time in several quarters, and most of its user losses were at the lower end.
The telco’s stock surged nearly 13% in intraday trade Monday before closing 7.1% higher at Rs7.65 on the BSE.
“We have made progress (in fundraising conversations) since the last earnings call. I expect that we will be able to conclude the discussions relating to the equity investor in this quarter, which I had indicated in the last quarter,” Moondra said on the company’s fiscal second-quarter earnings call held on Monday afternoon.
The telco is also in talks with banks for additional funding, but that is contingent on it tying up the equity-led funding first, Moondra said.“Till date, they (the promoter) have not contributed anything. We had got some bank funding to tide over the short-term mismatch (in fund requirement) we had in the last quarter. The promoter’s commitment is that they will support us as and when required and we expect the promoter contribution should also come along with the tying up of the external funding,” Moondra said.The mismatch was related to the Rs 1,700 crore the company paid to the Department of Telecommunications against the August instalment of the 5G spectrum payment.
The promoter contribution is not contingent on the external fundraise though the expectation is that the two can happen together, he said. “Most likely it will conclude this quarter. That’s our expectation.”
While Moondra did not give any information regarding the amount the company intends to raise from external investors, he said the business and investment plan presented to prospective investors covered all requirements.
“The total equity plus bank funding we are targeting is of a nature that we should be able to use that funding to make investments and improve operations to the extent that we become self-sufficient – both in terms of cash generation from business being able to meet our requirements, and if there is a gap, to be able to raise new funding,” the telco’s top executive said.
Last Friday, Vodafone Idea reported a wider net loss of Rs 8,737.9 crore for the second quarter, compared with Rs 7,840 crore the previous three months, as the cash-strapped telco provisioned for higher taxes after a recent Supreme Court ruling, and interest costs continued to weigh.
Revenue was flat sequentially at Rs 10,716.3 crore compared with Rs 10,655.5 crore in the June quarter.
On the Rs 822 crore tax provision the telco has made, Moondra said the provision was made on a conservative note and the actual amount could be lower.
“We have large amounts of tax refunds that we are yet to receive from the tax department. So, the department will do the calculations and we will know the exact amount. Largely the amount should be offset by the refunds (due to the company) and will not lead to any immediate incremental cash outflows,” Moondra said.
Vodafone Idea has also managed to protect its premium customer base in the second quarter, Moondra said.
“After a fairly long period of time, we have seen an overall decline in subscribers while we saw a net addition in the post-paid subscribers, though it was marginal. It clearly shows the attractiveness of our proposition that as far subscribers are concerned, we are moving in the right direction,” Moondra said.
He said the fall in subscriber numbers by 1.6 million during July-September was the lowest for a quarter for the telco since Vodafone India and Idea Cellular merged to form Vodafone Idea.
Most of the churn had happened in the entry-level segment, mainly because of the tariff interventions the telco took, Moondra said. He also stressed that the impact of Jio Bharat on Vodafone Idea’s entry-level churn was not significant and that the exits came primarily because of the tariff interventions taken.
The telco had reduced the validity of the Rs 99 prepaid pack to 15 days (from 28 days) in 15 circles, most of it in August. The full impact of these measures will reflect in the coming quarter, its management said.
Moondra said the addition of 1.8 million 4G subscribers in the July-September period was the highest in eight quarters. This, along with tariff interventions and migration of users to higher-priced plans, contributed to a 2.1% sequential increase in average revenue per user to Rs 142.
