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 14^th February 2022 (Can be claimed as Valentine Stock). The details of Bonds are as under:

Vodafone Bond Yeilds
ISIN No	Maturity Date	Size (In Crores)	Yields as on	Remarks
INE669E08250	13.12.2021	1,500.00	Not Available	6000 Crore Maturity before 14.02.2022
INE669E08268	04.01.2022	1,000.00	Not Available
INE669E08276	17.01.2022	500.00	Not Available
INE669E08284	27.01.2022	2,000.00	20.86% (Last Traded  date 16.09.2021)
INE669E08292	31.01.2022	500.00	59.94% (Last Traded  date 08.09.2021)
INE669E08300	14.02.2022	500.00	35.23% (Last Traded  date 06.07.2021)
INE669E08318	02.09.2023	1,500.00	10.90% (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

Particulars	Amount
Borrowings from Banks payable after 12 months	29379 Crore
Liabilities payable within 12 months (Spectrum Dues, Bonds and Bank Borrowings)	199051 Crore
Trade Payables	13276 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:

Particulars	2017-18	2018-19	2019-20	2020-21	Total (Rs)
Sales	28279	37092	44958	41952	152281

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 Bank	Amount
State Bank of India	13,350.00
IDBI Bank Limited	10,925.00
IDBI TRUSTEESHIP SERVICES LIMITED	9,565.38
IndusInd Bank Limited	3,000.00
SBICAP TRUSTEE COMPANY LIMITED	1,935.00
Kotak Mahindra Bank Limited	1,271.17
ICICI BANK LIMITED	1,150.00
Punjab National Bank	1,027.70
CHASE MANATTHAN BANK	372.50
Canara Bank Limited	300.00
UTI BANK LIMITED	130.00
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:

SNo	Charge Id	Charge Holder Name	Date of Creation	Amount in Crores
1	10136856	Bank of India	19-12-2008	50.00
2	90111631	BANK OF MAHARASHTRA	28-05-2002	125.00
3	90111627	BANK OF MAHARASHTRA	19-04-2002	0.50
4	80020070	BOB SBI SBICIBL SAKURA BANK LTD BRITISH BANK OF MIDDLE EAST	01-12-1997	62.48
5	10114966	Canara Bank Limited	12-07-2008	300.00
6	90034382	CHASE MANATTHAN BANK	21-11-1997	100.00
7	90034366	CHASE MANATTHAN BANK	13-11-1997	100.00
8	90034258	CHASE MANATTHAN BANK	26-08-1997	172.50
9	90035520	CITIBANK	19-11-1999	2.00
10	10586444	HDFC BANK LIMITED	24-07-2015	30.00
11	90062395	HDFC BANK LIMITED	03-12-2001	20.00
12	100283526	ICICI BANK LIMITED	20-08-2019	1,150.00
13	100134479	IDBI Bank Limited	01-11-2017	8,000.00
14	10549947	IDBI Bank Limited	23-01-2015	2,625.00
15	10270568	IDBI Bank Limited	26-02-2011	300.00
16	100182858	IDBI TRUSTEESHIP SERVICES LIMITED	06-06-2018	995.00
17	80014941	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	170.00
18	90149492	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	0.38
19	80014937	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	1,680.00
20	80014664	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	1,680.00
21	80014670	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	1,680.00
22	90113214	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	1,680.00
23	80014668	IDBI TRUSTEESHIP SERVICES LIMITED	20-02-2004	1,680.00
24	100274512	IndusInd Bank Limited	20-06-2019	3,000.00
25	90039110	INFASTRUCTURE DEVELOPMENT FINANCE COMPNAY LTD.	28-06-2004	100.00
26	100350980	Kotak Mahindra Bank Limited	21-07-2020	514.17
27	100328040	Kotak Mahindra Bank Limited	22-01-2020	757.00
28	100284106	Punjab National Bank	20-08-2019	1,000.00
29	90039803	PUNJAB NATIONAL BANK	11-02-2005	0.40
30	90037153	PUNJAB NATIONAL BANK	16-03-2002	0.30
31	90062332	PUNJAB NATIONAL BANK	12-09-2001	27.00
32	100383242	SBICAP TRUSTEE COMPANY LIMITED	05-11-2020	1,935.00
33	100307095	State Bank of India	27-11-2019	2,150.00
34	100220417	State Bank of India	05-12-2018	2,000.00
35	10321276	State Bank of India	21-10-2011	9,200.00
36	10047846	UTI BANK LIMITED	09-04-2007	110.00
37	90062322	UTI BANK LIMITED	28-08-2001	20.00

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

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