Birlas may let Voda Idea go insolvent if government doesn't help

MUMBAI: Aditya Birla Group will not infuse any fresh equity into VodafoneIdea Ltd, its telecom joint venture with Vodafone Group of UK, and let it opt for insolvency if the government does not provide substantial relief, including on the telco's adjusted gross revenue (AGR)-based dues, which could be over 39,000 crore, senior executives aware of the matter said. 


"The telecom business seems to be making money for everyone else except the players. It is unviable and unsustainable and will only drag down the group's profitability. We need to rethink our capital allocation better in a difficult business environment," said a senior group executive.



A group official said the Indian conglomerate agreed with the comments of Vodafone Group CEO Nick Read on Tuesday.

"If you don't get the remedies being suggested, the situation is critical," Read said after Vodafone Group's quarterly results on Tuesday. "If you're not a going concern, you're moving into a liquidation scenario - can't get any clearer than that."



Read added that without any government relief, the future of the India JV was in doubt, and that the global telco won't be infusing any further equity into the venture. 

He sought to go back on some of his remarks on Wednesday. In an apology letter to the Indian government, Read said his comments were distorted and thanked the administration for setting up a committee of secretaries to devise a relief package for the stressed sector