Vodafone Thought: Calling Vodafone Thought’s Rs 18,000 crore follow-on public supply (FPO) a step in proper course, Kotak Institutional Equities in its newest observe mentioned the transfer ought to assist bridge the community protection hole and enhance Vodafone Thought’s competitiveness versus friends to some extent.

With a pointy discount in financial institution debt, Vodafone Thought would have the ability to safe additional funding from banks and that

the fundraise ought to enhance its near-term fortunes, Kotak mentioned. The brokerage, nonetheless, doesn’t count on Vodafone Thought to achieve any significant market share from friends and stays involved about potential massive fairness dilution because of conversion of presidency dues.

“Probably, the GoI might personal an 80 per cent-plus stake in Vodafone Thought on a completely diluted foundation within the worst case, which might restrict any significant upside for Vi’s minority buyers,” the broking agency mentioned.

Vodafone Thought owes Rs 2.1 lakh crore debt to the federal government, with a big a part of it underneath moratorium till 1HFY26. It will have repayments of Rs 29,100 crore in H2FY26 and Rs 43,000 crore yearly over FY2027-31.

“The fund-raise and potential tariff hike ought to enhance Vi’s financials. Nevertheless, we don’t see a reputable case the place Vi’s money Ebitda (at present Rs 8,300 crore) would improve sufficiently to fulfill massive annual dues to the GoI. Whereas there might be an extension of the moratorium, a partial waiver (reduction on AGR dues) and additional reduction from the GoI, we consider writing off GoI dues in entirety for a particular firm will probably be tough,” Kotak mentioned.

Kotak expects Vodafone Thought to transform a big a part of the GoI dues into fairness over time, which might doubtlessly result in massive fairness dilutions for Vi’s non-GoI buyers.

“Within the worst case (100 per cent of GoI’s dues transformed to fairness at Rs 10/share), GoI might find yourself with 81 per cent stake, with current promoters stake diluted to 9 per cent (versus 49 per cent at present and 38 per cent submit fund-raise) and non-promoters’ stake diluted to 9 per cent (from 16 per cent at present and 36 per cent submit fund-raise). We increase our FY2025-26E Ebitda sharply on decrease subscriber declines submit fund increase and better ARPU,” it mentioned whereas conserving its score on Vodafone Thought suspended, for now.