Shares of Vodafone Idea (Vi) declined nearly 4 per cent on Tuesday after analysts raised concerns over the company’s large spectrum payment obligations and limited scope for further government relief. The stock was trading at Rs. 10.87 against the previous close of Rs. 11.25. According to analysts at Motilal Oswal, Vodafone Idea faces restricted options for relief on nearly ₹1.2 lakh crore in spectrum dues owed to the government from previous auctions. With peers such as Bharti Airtel and Reliance Jio having repaid most of their spectrum liabilities, the possibility of similar relief measures—such as interest waivers or further extensions of payment timelines—appears limited. The brokerage highlighted that Vi’s spectrum repayment obligations will rise sharply in the coming years. The company is scheduled to pay ₹6,200 crore in FY27, ₹16,600 crore in FY28, and ₹27,000 crore annually from FY29 to FY32.
Motilal Oswal added that an equity fundraise by Vodafone Idea could potentially enable the Government of India to convert additional spectrum dues into equity. However, such a move would require a sizable capital raise and could lead to significant dilution for existing shareholders. Meanwhile, analysts at Axis Capital noted that the recent AGR relief could help Vodafone Idea close its long-pending debt raise, which would support capital expenditure, help narrow the network gap with competitors, and slow subscriber churn. Vodafone Idea invested ₹10,000 crore in FY25 on capital expenditure, substantially lower than peers Bharti Airtel and Reliance Jio, which have spent around ₹30,000 crore and ₹46,000 crore respectively on 5G and broadband over a three-year average.
Looking ahead, Axis Capital warned that spectrum auctions scheduled from 2029 could further pressure Vodafone Idea’s balance sheet. Net debt could increase depending on how much spectrum the company chooses to re-acquire. Analysts believe Vi is unlikely to repurchase all its existing holdings, given its reduced market share compared to when the spectrum was initially acquired. Brokerages also stressed that the proposed ₹25,000 crore debt raise is crucial for Vodafone Idea to execute its ₹50,000–₹55,000 crore capital expenditure plan. The investment is aimed at strengthening 4G coverage and capacity, expanding 5G services, arresting subscriber losses, and aligning growth with industry trends. JM Financial added that Vodafone Idea would need its average revenue per user (ARPU) to rise to ₹340 by FY29 to meet future cash outflows through internal accruals.