Cash-strapped Vodafone Idea will restart its discussions with banks this month to raise funds through debt, as it looks to maintain its capital expenditure intensity beyond the first half of FY26.
The proposed fundraise will be crucial for Vodafone Idea to continue investing in its 4G network and expanding its 5G footprint.
“Currently, we have got capex under implementation in the ballpark of about Rs 5,000- 6,000 crore. A large part of it would be implemented in the current quarter and some of it may spill over to the next quarter,” its chief executive Akshaya Moondra said, adding fundraise will be required for the remaining quarters of the year.
“After the (debt-to-equity) conversion (by the government), we have started re-engaging with the banks. There are some activities which we have to finish, which are currently in progress and we will start discussions with the banks somewhere in this month,” Moondra said in the fourth-quarter earnings call. He, however, did not specify what these actions and activities were.
He reiterated that while banks want clarity on the adjusted gross revenue (AGR) issue, it is not causing an impediment to Vodafone Idea’s discussions regarding fundraise.
Vodafone Idea’s AGR liabilities as on March 31, 2025 were Rs 76, 000 crore. Its total payment obligations to the government stood at Rs 1.94 lakh crore as of March 31, 2025, including deferred payment obligation towards spectrum payable over the years till FY44 and AGR (including interest accrued but not due) payable over the years till FY31.
Its bank debt at the end of March was Rs 2, 330 crore.
On Friday, the telco’s board approved raising Rs 20,000 crore in one or more tranches through further public offer or private placement (including qualified institutions placement) or securities convertible into equity shares, global depository receipts, American depository receipts or bonds including foreign currency convertible bonds.
Moondra added that the approval sought from the board was enabling fundraising through means other than bank borrowing and/or NCDs. While the company will focus on bank borrowing to raise funds, he said, it is also leaving room to explore other routes for which the enabling approval was sought.
The telco’s planned capex deployment will allow it to reach around 84% population coverage for its 4G network.
To drive further coverage, it will require funding to deploy capex. Vodafone Idea intends to deploy 220,000 unique sites over a period of two-to-three years as part of its network augmentation plan.
“In terms of its next round of capex, we have yet to decide and firm up our plans. It also has some dependence on the funding,” he added.
The firm fell short on its capex guidance for FY25 by almost Rs 450 crore. The capex for the full financial year came in at Rs 9, 570 crore, lower than the company’s full year guidance of Rs 10, 000 crore.
Vodafone Idea is engaged with the government to find a solution to the AGR matter, after a recent writ petition requesting a waiver of Rs 45,000 crore in AGR and spectrum-related payments was turned down by the apex court.
“I see no reason why the government should be constrained in any way to offer relief, if it decides to do,” Moondra said. He explained that the Supreme Court’s stance on the matter has been that the issue is a policy matter which is within the purview of the government and they would not interfere in it. He however refused to give further details on whether there is any indication from the government to provide relief.