Vodafone Idea could save Rs 58 billion in cash flows annually if AGR liability lowered: Report

NEW DELHI: Vodafone Idea could potentially save Rs 58 billion in cash flows annually if the AGR liability were lowered to its self-assessed value. However, even at the lower assessed amount, the company would remain FCF (free cash flow) negative, and that ARPUs would need to be at 1.7x of current levels for Vodafone Idea to be FCF neutral, Goldman Sachs said in a note.

“We expect net debt-to-EBITDA for Vodafone Idea to stay north of 5x at least until FY25E in either case,” it said.

Bharti Airtel and Vodafone Idea have petitioned the Supreme Court of India to modify its earlier order on Adjusted Gross Revenue (AGR) dues. ET recently reported that both telcos have said that the amounts payable by them should be significantly lower vs that demanded by the DoT (Department of Telecom), citing ‘arithmetical errors’ by the latter.