Vodafone Idea-Update on Bond yields(Junk Bond) and Liabilities

Before going into depth of Vodafone Idea Debt, let us look at the Bond yields of Vodafone Idea. Out of 7500 crore, Rs 6000 crore is required to be paid by company before 14th February 2022 (Can be claimed as Valentine Stock). The details of Bonds are as under:

Vodafone Bond Yeilds
ISIN NoMaturity DateSize (In Crores)Yields as onRemarks
INE669E0825013.12.2021          1,500.00Not Available6000 Crore Maturity before 14.02.2022
INE669E0826804.01.2022          1,000.00Not Available
INE669E0827617.01.2022             500.00Not Available
INE669E0828427.01.2022          2,000.0020.86% (Last Traded  date 16.09.2021)
INE669E0829231.01.2022             500.0059.94% (Last Traded  date 08.09.2021)
INE669E0830014.02.2022             500.0035.23% (Last Traded  date 06.07.2021)
INE669E0831802.09.2023          1,500.0010.90% (Last Traded date 31.10.2018) 
Total (Rs)7,500.00

Now let us further look into the liability of Vodafone as per the Balancesheet as on 31.03.2021

ParticularsAmount
Borrowings from Banks payable after 12 months29379 Crore
Liabilities payable within 12 months (Spectrum Dues, Bonds and Bank Borrowings)199051 Crore
Trade Payables13276 Crore
However, Government has granted Moratorium on Spectrum dues for 4 years on liability.

Let us Look at last 5 years sales data of Vodafone idea:

 Particulars2017-182018-192019-202020-21Total (Rs)
Sales28279370924495841952152281

If we compare with the total Liabilities which is 241076 crore as on 31.03.2021, the sale of last 5 years is 1,52,281 Crore. Now even the company increases the tariff rate then also it will be difficult catch up with the debt liability. Further the interest expenses of company is more than 17,000 crore on annual basis. Furthermore, on an average more than 5000 crore for acquiring Fixed Assest.

Now let us see the secured charges of Vodafone with Banks on Summary basis and detailed basis:

Summarised Debt exposure of Banks:

(‘in Crores)
Name of BankAmount
State Bank of India13,350.00
IDBI Bank Limited10,925.00
IDBI TRUSTEESHIP SERVICES LIMITED9,565.38
IndusInd Bank Limited3,000.00
SBICAP TRUSTEE COMPANY LIMITED1,935.00
Kotak Mahindra Bank Limited1,271.17
ICICI BANK LIMITED1,150.00
Punjab National Bank1,027.70
CHASE MANATTHAN BANK372.50
Canara Bank Limited300.00
UTI BANK LIMITED130.00
BANK OF MAHARASHTRA 125.50
INFASTRUCTURE DEVELOPMENT FINANCE COMPNAY LTD. 100.00
BOB SBI SBICIBL SAKURA BANK LTD BRITISH BANK OF MIDDLE EAST 62.48
Bank of India 50.00
HDFC BANK LIMITED 50.00
CITIBANK 2.00
Total(Rs in Crores) 43,416.73

Detailed Debt Exposure on datewise basis:

SNoCharge IdCharge Holder NameDate of CreationAmount in Crores
110136856Bank of India19-12-2008                 50.00
290111631BANK OF MAHARASHTRA28-05-2002               125.00
390111627BANK OF MAHARASHTRA19-04-2002                  0.50
480020070BOB SBI SBICIBL SAKURA BANK LTD BRITISH BANK OF MIDDLE EAST01-12-1997                 62.48
510114966Canara Bank Limited12-07-2008               300.00
690034382CHASE MANATTHAN BANK21-11-1997               100.00
790034366CHASE MANATTHAN BANK13-11-1997               100.00
890034258CHASE MANATTHAN BANK26-08-1997               172.50
990035520CITIBANK19-11-1999                  2.00
1010586444HDFC BANK LIMITED24-07-2015                 30.00
1190062395HDFC BANK LIMITED03-12-2001                 20.00
12100283526ICICI BANK LIMITED20-08-2019            1,150.00
13100134479IDBI Bank Limited01-11-2017            8,000.00
1410549947IDBI Bank Limited23-01-2015            2,625.00
1510270568IDBI Bank Limited26-02-2011               300.00
16100182858IDBI TRUSTEESHIP SERVICES LIMITED06-06-2018               995.00
1780014941IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004               170.00
1890149492IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004                  0.38
1980014937IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004            1,680.00
2080014664IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004            1,680.00
2180014670IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004            1,680.00
2290113214IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004            1,680.00
2380014668IDBI TRUSTEESHIP SERVICES LIMITED20-02-2004            1,680.00
24100274512IndusInd Bank Limited20-06-2019            3,000.00
2590039110INFASTRUCTURE DEVELOPMENT FINANCE COMPNAY LTD.28-06-2004               100.00
26100350980Kotak Mahindra Bank Limited21-07-2020               514.17
27100328040Kotak Mahindra Bank Limited22-01-2020               757.00
28100284106Punjab National Bank20-08-2019            1,000.00
2990039803PUNJAB NATIONAL BANK11-02-2005 0.40
3090037153PUNJAB NATIONAL BANK16-03-20020.30
3190062332PUNJAB NATIONAL BANK12-09-200127.00
32100383242SBICAP TRUSTEE COMPANY LIMITED05-11-20201,935.00
33100307095State Bank of India27-11-20192,150.00
34100220417State Bank of India05-12-20182,000.00
3510321276State Bank of India21-10-20119,200.00
3610047846UTI BANK LIMITED09-04-2007110.00
3790062322UTI BANK LIMITED28-08-200120.00

Spectrum Dues

Vodafone Idea has total gross debt as of June-end stood at Rs 1.91 Lakh Crore. It comprised deferred spectrum obligations, AGR liability and bank loans. This includes deferred spectrum payment obligations of Rs 1.06 Lakh Crore and AGR dues of over Rs 62,000 crore.

Conclusion

Seeing the Bond yields of more than 59% and liability of More than 2 lakh crore the moratorium period of 4 years on Spectrum dues seems to be nothing rather than deferment of debt. Further increasing prices of Mobile recharge will force the user to shift towards other operator rather than Vodafone. Moreover, with 5 G technology is under progress Vodafone will have more trouble on account of capex expenditure of future requirement over and above 2 lakh crore liability. So seeing the present situation, the condition of Vodafone can be termed as deferment of death rather than calling it turnaround story.

From CA Nishant Maheshwari and Vishal Vora

In case you are interested in making a contribution to our writing, please do so in the following account:

Account Number: 00000037522669317

Name: Rashi Maheshwari
IFSC Code: SBIN0030115

Name of Bank: SBI India,YN Road Branch Indore-India

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