Vodafone Idea said on Monday that it was deeply engaged with a consortium of lenders led by State Bank of India for a proposed Rs 35,000-crore funding package, as the telecom operator looks to accelerate network investments and expand 5G services.
Speaking at the company’s post-results analyst conference, CEO Abhijit Kishore said the proposed package includes around Rs 25,000 crore in loans and nearly Rs 10,000 crore in non-fund-based facilities such as letters of credit for procurement of network equipment.
“We are deeply engaged with the lenders for the funding package,” Kishore said, adding that discussions with banks were progressing following recent relief on adjusted gross revenue (AGR) dues.
The funding package is aimed at supporting Vodafone Idea’s capital expenditure plans as the telecom operator seeks to improve 4G coverage and roll out 5G services in key markets amid intense competition from rivals Reliance Jio and Bharti Airtel.
The company said the recent AGR relief has improved its cash flow visibility and strengthened ongoing discussions with lenders. Earlier this year, the department of telecommunications revised Vodafone Idea’s AGR liabilities downward and extended the repayment schedule, easing near-term payment obligations.
Kishore said the proposed borrowing would be utilised primarily for network expansion and not for servicing statutory liabilities.
Vodafone Idea has been looking to secure long-term funding after the government converted a portion of dues into equity, becoming the company’s single-largest shareholder. The operator has said additional capital infusion is critical to arrest subscriber losses and improve network competitiveness.
Executives said the company continues to prioritise investment in network infrastructure to improve customer experience and stem market share erosion. Vodafone Idea has been losing subscribers consistently over the past several quarters as rivals stepped up 5G rollouts and network expansion.
The company’s management also indicated that discussions with lenders have become more constructive after the AGR relief measures, though the funding package is yet to be finalised.
Bankers have sought greater visibility on the company’s long-term business outlook and repayment ability before committing to the exposure. Lenders are also evaluating the structure of guarantees and other conditions linked to the proposed borrowing.
The SBI-led consortium is expected to include a mix of public and private sector lenders.
Analysts said successful closure of the funding package would be critical for Vodafone Idea’s turnaround plans, particularly at a time when the telecom market is witnessing aggressive capital expenditure by larger rivals.