Indus TowersImage Credit source: File Photo

Indus Towers is now pushing Vodafone Idea (Vi) to settle its past dues and has refused to offer further relaxation in the payment plan it signed with its key, cash-strapped telco customer earlier this year. The top management of Indus said that Vi has started paying 90-100% of the existing dues. The tower company is closely monitoring the payment pattern of the telco and its funding position. However, Indus indicated that it would not reduce its services or cut off Vi’s access to its towers, as long as the telco regularly paid its existing dues.

Indus Towers CFO Vikas Poddar said on the tower company’s earnings call that Vi has improved and has paid around 90-100% of the dues in the fourth quarter, but there is no new payment plan for them in FY2023-24 No, and we are in talks with the customer to clear the past dues. Under the current payment plan, Vi has committed to pay 100% of its current dues to Indus from January 2023, and also to pay its past dues by December 31, 2022, over a period of seven months starting January .

In the third quarter of FY2023, Vi had cited challenges in complying with the overpayment plan. The telco’s efforts to raise around Rs 20,000 crore through debt and equity have also been unsuccessful for over a year. Poddar said that there may be some challenges, but we are working with V and expect to resolve the issue as per the agreed payment plan.

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need to see free cash flow

Indus Management says that the tower may consider dividend payment only after the working capital position of the company becomes more comfortable. We need to look at our Free Cash Flow (FCF) for a few more quarters. Much depends on the funding position of Vi, and any dividend distribution can be considered only after the stress level on the working capital position eases.

Vi completed the payment

Analysts say the sequential decline in Indus’ business in the fourth quarter of the financial year indicates that Vi has paid almost its entire dues for January-March. In the October-December period, the turnover of the tower company fell to Rs 4,868.7 crore from Rs 5,062.4 crore in the fourth quarter. Tenancy growth at Indus Towers and 3.5K/3.4K was the highest in 6-8 quarters.

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23% decline in net profit

Indus reported a 23% decline in its fourth quarter net profit to Rs 1,399 crore as the telecom infrastructure provider continued to service dues from Vi. It has made a provision of Rs 43.4 crore for loans in the January-March period after Vi warned of possible challenges in meeting future payments.