Mahusudhan Kela Questions Funding Risk As Promoters Signal Equity Support

Vodafone Idea Ltd.'s earnings call turned to balance sheet risk when ace investor Madhusudan Kela on Wednesday questioned how the telecom operator would fund its turnaround if cash generation falls short, drawing an explicit response from promoters on their willingness to inject equity. Kela laid out the company's expected cash requirements over the next three years, combining about Rs 49,000 crore of spectrum payments and Rs 45,000 crore of planned capital expenditure, and asked whether a shortfall would be met by promoters or passed on to shareholders. The question goes to the centre of Vodafone Idea's equity story, as the company embarks on a capital-intensive network expansion while seeking to stabilise operations after years of stress. ALSO READ: Vodafone Idea Q3 Concall Top Takeaways: Large Capex Plan, No New Equity Infusion, Tariff Outlook Promoters Step In Management deferred the response to the promoter side. Director Sushil Agarwal said the promoters have consistently supported the company and would continue to do so if required. “As a promoter, we have stood by this company all throughout,” Agarwal said. He added that if equity is needed, promoters would not “run away” and would step in before the burden falls on public shareholders. Agarwal pointed to past support from the promoter group, including repeated capital commitments during periods of regulatory and financial stress, and said the company should be viewed in that context. The Math Behind The Question Kela's intervention followed management disclosures that Vodafone Idea faces about Rs 49,000 crore of spectrum payments over the next three years, alongside a Rs 45,000 crore network investment plan aimed at expanding 4G and 5G coverage. The company has said it plans to fund part of this through about Rs 25,000 crore of debt, with the remainder expected to come from internal accruals. The exchange highlighted the risk that a slower-than-expected earnings recovery could reopen the funding gap. ALSO READ: Vodafone Idea Q3 Results: Telco Trims Net Loss, ARPU Rises 3%