Vodafone Idea’s Rs 3,500 crores of NCDs downgraded

Vodafone Idea’s (VIL) long-term non-convertible debentures (NCD) of Rs 3,500 crore were downgraded by Brickwork Ratings on Tuesday from A-plus to AA-minus, maintaining the outlook as negative. The Bengaluru-based ratings agency noted that the rating revision is on account of deterioration in the company’s subscriber base and market share, significant net losses along with a cash loss in financial year 2018-2019 and considerable repayment obligations (including deferred spectrum payments) falling due over the medium term.

The rating further continues to remain constrained on account of high debt, intense competitive pressures in the sector and the company’s susceptibility to regulatory and technological risks associated with the sector. The outlook for VIL has been kept as negative as the ratings agency believes that no significant improvement is likely to happen in the company’s business risk profile over the medium term.