ICRA Upgrades Vodafone Idea’s Long-Term Rating to ‘BBB’ with Positive Outlook

ICRA Ltd on Wednesday upgraded the long-term fund-based credit rating for Vodafone Idea Ltd’s loans of ₹2,327 crore from ‘BBB-’ to ‘BBB’, while revising the outlook from ‘stable’ to ‘positive’, citing improved regulatory clarity and fresh financial support from promoters.

The rating agency noted that the upgrade follows the government’s revision of Vodafone Idea’s adjusted gross revenue (AGR) dues earlier this year and the settlement of the Contingent Liability Adjustment Mechanism (CLAM) agreement with promoter Vodafone Group Plc, according to an Informist report.

Eased Cash Flow and Regulatory Support

ICRA highlighted that the revised AGR payment schedule will significantly reduce cash flow pressure over the coming years. Under the new structure:

• Vodafone Idea will pay approximately ₹124 crore annually from FY26 to FY31
• Around ₹100 crore per year between FY32 and FY35
• The remaining dues will be cleared in six equal annual instalments between FY36 and FY41

Additionally, the CLAM settlement and promoter support from Vodafone Group are expected to inject ₹2,307 crore in cash over the next 12 months, further strengthening the company’s liquidity position.

Strong Market Presence and Promoter Support

Vodafone Idea continues to maintain a nationwide footprint, holding nearly 17% of India’s subscriber base as of September 2025. The rating agency also cited backing from promoter groups, namely the Aditya Birla Group and Vodafone Group Plc, as a key supportive factor.

The government’s prior decision to convert ₹36,950 crore of spectrum dues into equity has further improved the company’s financial profile and eased repayment obligations.

Despite the positive outlook, ICRA noted ongoing pressures on Vodafone Idea’s subscriber base, which declined to 19.2 crore in December 2025 from 21.5 crore in December 2023, largely due to under-investment in the network in recent years.

The rating agency emphasized that the company’s ability to secure bank debt for capex, coupled with timely support from the government and promoters, will be key credit monitorables. The ‘positive’ outlook reflects ICRA’s expectation of healthy revenue and profit growth following timely capex execution and potential tariff increases.

Also Read: Silver Touch Technologies Secures Order from Odisha Government for CM-KISAN Platform

Vodafone Financial Performance Highlights

• Q3FY26 Revenue: ₹11,323 crore, up 1.1% from ₹11,194.7 crore in Q2FY26
• Net Loss:₹5,286 crore, narrower than ₹5,524.2 crore in the previous quarter, aided by an exceptional profit of ₹1,078 crore
• Adjusted Losses: Widened to ₹6,368 crore from ₹5,565 crore QoQ
• ARPU: ₹186, up 7.3% YoY from ₹173, driven by customer upgrades

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