CRISIL downgrades Vodafone’s Rs3500 cr NCDs

‘Share may fall further when market opens next week’

MUMBAI: The leading rating agency CRISIL has downgraded the non-convertible debentures of Rs3,500 crore of the erstwhile Vodafone Mobile Services Ltd (VMSL) from A/Negative to BBB+/Rating watch with negative implications.

 On October 31, CARE had downgraded the Long-Term Bank Facilities of the company from CARE A- to CARE A­- (Credit Watch with Negative Implications).
Similarly, Non-Convertible Debentures were downgraded from CARE A- to CARE A­- (Credit Watch with Negative Implications

As per the rating rationale published on the CRISIL website, the Friday’s (Nov 1) downgrade was on account of recent Supreme Court ruling dated October 24, 2019 on the adjusted gross revenue (AGR) matter and delay in asset monetization viz. stake sale in Indus Towers.

The recent Supreme Court ruling once implemented would require Vodafone Idea to shell out about Rs40,000 crore in licence fee and spectrum usage charges calculated as a percentage of AGR.

SC ruling will invariably send the company searching for new funding and this is certain to break the back of the already embattled company that has been in red for the past couple of quarters.

In the past one year, the Vodafone Idea share has fallen from Rs24.50 to Rs4.20, which was the closing price on Friday (November 1, 2019.

 

 

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