Assuming a 15 year payment timeline, ICICI Securities expect annual instalments of around Rs 6,600 crore for Vodafone Idea and Rs 3,400 crore for Bharti Airtel. "While for Airtel, it is very much within the ability, we expect a meaningful case for Vodafone Idea's long term survival only when there is substantial capitalisation by promoters/ strategic partners and/or change in regulations such as floor tariff norms, lowering of levies, etc," the brokerage firm said in a note.
“The future for Vodafone Idea looks bleak due to its high leverage and huge cash requirements. We continue to remain bullish on Bharti/RJio due their healthy balance sheets and strong network capabilities. We value Bharti on FY22E EV/EBITDA multiple of 12x on its India business and 6x on Africa business to derive TP of INR690/share. We believe RJio should garner premium valuations due to lower leverage post its capital reorganization and series of stake sales,” Motilal Oswal Financial Services said in telecom sector update.
Those at CLSA said that they would await the final verdict on the AGR case but "assuming if 20 years staggered payment is granted but the court mandates DoT estimates for AGR dues, Vodafone Idea’s annual AGR payment will jump from 5 per cent to 30 per cent of its cash Ebidta over FY21/22".
"Although 20 years of staggered payments are likely and upcoming potential sector floor tariffs, it will likely compel Vodafone Idea’s promoters to consider insolvency plans," it said.
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