Dues conversion eases near-term constraints for Vodafone Idea, but structural challenges intact: Analysts

The government’s move to convert spectrum auction dues of Vodafone Idea into equity will ease near-term liquidity constraints, but structural challenges remain for the telco with factors like stabilisation of subscriber base, tariff hikes, long-pending debt raise, and further relief on dues being vital for the telco’s long-term survival, say analysts. IIFL Capital, in its note, said while the latest move marks improved prospects for VIL’s debt-raising, the underlying free cash flow generation is still inadequate to cover regulatory payouts.