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Informist, Wednesday, Mar. 4, 2026

 

--ICRA ups Vodafone Idea long term rating on INR 23 bln loan to 'BBB' 

 

NEW DELHI – Rating agency ICRA Ltd. Wednesday said it has upgraded Vodafone Idea Ltd.'s long-term fund-based credit rating to 'BBB' from 'BBB-'. ICRA also revised the outlook for Vodafone Idea's INR 23.27 billion loans to 'positive' from 'stable'.

 

The upgrade is based on the government's revision of Vodafone Idea's adjusted gross revenue dues in January and the settlement of the contingent liability adjustment mechanism agreement with Vodafone Group PLC, the promoter of Vodafone Idea, ICRA said in a press release. Under the revised arrangement for adjusted gross revenue dues, Vodafone Idea will pay about INR 1.24 billion per annum starting from 2025-26 (Apr-Mar) till FY31. This will be followed by payments of around INR 1 billion a year from FY32 to FY35. The remaining dues will then be settled in six equal yearly instalments between FY36 and FY41, the rating agency said.

 

The contingent liability adjustment mechanism and support from Vodafone Group will provide INR 23.07 billion of cash to Vodafone Idea in the next 12 months, according to ICRA. 

 

These developments are likely to provide a push to Vodafone Idea's capital expenditure plans, which were deferred due to a lack of visibility into the aforesaid matters, the rating agency said. The telecom operator has planned capital expenditure of INR 450 billion between FY27 and FY29 to expand 4G coverage in priority circles, roll out 5G, and augment capacity, according to ICRA. 

 

"Execution of the capex, alongside an expected industry tariff rationalisation over the next 12–24 months and improving network quality, is expected to support ARPU (average revenue per user) improvement and OPBDITA (operating profit before depreciation, interest, taxes, and amortisation) growth," ICRA said. 

 

The rating upgrade also factored in Vodafone Idea's pan-India market position, with nearly 17% subscriber share as of September 2025, and the presence of the Aditya Birla Group and Vodafone Group Plc as promoter groups, the rating agency said. The ICRA rating also factored in the government's conversion of INR 369.50 billion in spectrum dues. In addition, the government's relief on adjusted gross revenue dues will materially ease Vodafone Idea's payment obligations and will improve the cash flow visibility, the rating agency said.

 

The rating, however, remains constrained by Vodafone Idea's consistent subscriber churn. The subscriber base of Vodafone Idea has declined to around 192 million as of December 2025 from 215 million as of December 2023, as the capital expenditure remained muted in the past, the rating agency said.

 

"VIL's (Vodafone Idea) ability to tie up bank debt to roll out the capex as per the plan, a timely support from the GoI (government of India), and promoters, along with a capex funding tie-up, remains the key credit monitorables. The 'positive' outlook reflects ICRA's expectation of healthy revenue and profit growth following timely capex implementation and the possibility of a tariff hike, going forward," ICRA said.

 

For the December quarter, Vodafone Idea had reported a consolidated net loss of INR 52.86 billion on revenues of INR 113.23 billion. Wednesday, shares of Vodafone Idea closed at INR 9.99 on the National Stock Exchange, down 2.9%. End

 

Reported by Astha Oriel 

Edited by Saji George Titus

 

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