Vodafone Idea (Vi) is making progress towards securing much-needed equity funding, as the company has informed the Department of Telecommunications (DoT) that it has received term sheets from several potential investors. Akshaya Moondra, the CEO of Vi, revealed that one of these investors plans to meet with authorities to ensure ongoing government support. The telecom operator aims to raise funds to implement a comprehensive ₹65,000 crore capex plan over four years.
Vi's long-awaited equity funding is drawing closer to realization, with CEO Akshaya Moondra informing the Department of Telecommunications (DoT) about the company's receipt of term sheets from various potential investors. Moondra also noted that one of these prospective investors is seeking a meeting with government authorities to seek reassurances regarding continued support for Vi, which has been facing financial challenges.
In a letter dated August 8, Moondra conveyed to the DoT that securing external funding would kickstart an "accelerated" capex plan of ₹65,000 crore over four years, aimed at revitalizing the company's operations. Copies of this letter, seen by ET, were also shared with key figures such as communications minister Ashwini Vaishnaw, finance minister Nirmala Sitharaman, and the Prime Minister's Office.
An anonymous senior government official mentioned that Vi's fundraising efforts are nearing finalization and could be concluded within the next seven to ten days. The government holds a 33.1% stake in Vi, while UK-based Vodafone Group owns 32.3%, and India's Aditya Birla Group possesses 18.1%.
Moondra explained that significant progress has been made with various investor groups regarding equity and equity-linked capital raising. The CEO mentioned the receipt of term sheets from some of these groups and highlighted that a specific investor is seeking time for a meeting with government officials to ensure continued support due to the substantial government debt involved.
The influx of funds from investors would enable Vi to initiate its capex cycle, as outlined in the business plan. This cycle involves an accelerated investment of ₹65,000 crore over four years, followed by a normal capex phase to improve performance, enhance cash generation, and gradually repay government debt post-moratorium.
Vi's four-year payment moratorium is set to conclude in the third quarter of FY26, after which the company faces annual regulatory payments of over ₹40,000 crore. Despite challenges, Vi remains committed to addressing its dues and financial obligations while focusing on expanding its 4G coverage and preparing for a competitive 5G rollout in the future.
The company has been prioritizing payments to banks and financial institutions over vendor payments, leading to a reduction in dues to banks by 37.5% in a year. Moondra anticipates that bank debt will soon fall below ₹6,000 crore. However, vendor dues remain elevated, prompting Vi to seek additional time from the DoT to clear its license fees and spectrum usage charges for specific quarters.
Moondra also disclosed that Vi is in the process of securing a short-term loan of ₹4,000 crore from the State Bank of India (SBI) to cover pending statutory dues and the second installment of ₹1,680 crore for 5G spectrum purchases. While queries to Vi and SBI remained unanswered, Vi's shares closed 1.7% higher at ₹7.95 on the BSE on Thursday.
