Vodafone’s India JV with Idea in a precarious situation, says HSBC

Global brokerage major HSBC has noted that Vodafone’s joint venture (JV) in India is in a precarious situation after Vodafone’s global CEO reiterated that there will be no further injection of group equity into India.

London-based analysts at HSBC said in a research note after Vodafone Group’s half-yearly results announced on Tuesday that its Indian operation’s condition was critical.

“The JV in India is clearly in a precarious situation following the Supreme Court’s AGR-related fine,” HSBC said.

It noted that the carrying value of VIL on Vodafone’s balance sheet was now nil. Group cash flow guidance assumes no recharges or dividends from Indus Towers, a combined 250 million euro headwind, and the possibility that at least a portion of the 1.1 billion euro indemnity provision will be drawn on has likely risen.