The positive outlook factors in expectations of healthy revenue and profit growth, supported by timely capex rollout and potential tariff hikes.
Credit rating company ICRA Limited upgraded Vodafone Idea’s (Vi) rating to BBB and revised the outlook for ‘Long Term-Fund Based – Term Loans’ from ‘Stable’ to ‘Positive’ on March 4, 2026.
“Pursuant to Regulation 30(6) read with Clause 3 of Para A of Part A of Schedule III of the Securities and Exchange Board of India Regulations, 2015, it is hereby informed that ICRA Limited (ICRA) has upgraded the credit rating and revised the outlook assigned to the Long Term-Fund Based – Term Loans from ‘Stable’ to ‘Positive’ as per the letter issued to the Company today,” as per an exchange filing by the telco.
In a rationale note, ICRA said the upgrade reflects recent developments, including the Government of India’s January revision of Vi’s adjusted gross revenue (AGR) dues and the settlement of the contingent liability adjustment mechanism agreement with VIL’s promoter, Vodafone Group PLC. The telco also successfully raised funds through a follow-on public offer (FPO) in April 2024 and the issuance of NCDs through its subsidiary prior to the AGR relief. ICRA’s positive outlook reflects its expectation of healthy revenue and profit growth following timely capex implementation and the possibility of a tariff hike, the firm said in its note.
On the other hand, the rating remains constrained by the company’s consistent subscriber churn, which brought the subscriber base down to around 192 million as of December 2025 from 215 million as of December 2023, as capex remained muted in the past. Further, the overall deferred payment obligations towards spectrum and AGR remain elevated, at ₹1,24,877 crore and ₹80,502 crore, respectively, as of December 2025.
“The elevated obligations, along with the weak profitability metrics and negative net worth position, has translated into modest debt indicators,” said ICRA.
The bank debt remains low at around ₹ 1,126 crore as of December 2025, with the majority of the debt being in the form of deferred spectrum and AGR liabilities. The repayment burden for government liabilities pertaining to spectrum due conversion and AGR relief has come down to around ₹7,000 crore for FY27, around ₹15,400 crore for FY28, and around ₹27,000 crore for the period between FY29 and FY32. Vi’s ability to tie up bank debt to roll out capex as per the plan, timely support from the GoI and promoters, and a capex funding tie-up remain the key credit monitorables.
Published on March 4, 2026
