Vodafone Idea Can Get $3.5 Bn SBI-Led Loan If Kumar Mangalam Birla Stays On Board

Vodafone Idea is set to receive about $3.5 billion in debt financing from a State Bank of India-led consortium, with the funding aimed at helping the telecom operator strengthen its network, as per a report by Bloomberg (BBG).

The loan could also help it compete with Reliance Jio Infocomm and Bharti Airtel.

The consortium is also expected to include Union Bank of India and the National Bank for Financing Infrastructure and Development, the report said.

The lenders are seeking certain conditions, including Kumar Mangalam Birla remaining chairman of Vodafone Idea for the nearly 10-year tenure of the loan and guarantees covering repayment in the event of a default, according to Bloomberg.

Private Lenders Remain Key Hurdle

The development comes after an earlier Business Standard (BS) report on August 23 said SBI had agreed to sanction its portion of Vodafone Idea’s proposed loan after promoter companies agreed to provide guarantees, resolving a key point of contention in the discussions.

However, SBI was unlikely to release the funds until Vodafone Idea secured commitments from other lenders, particularly private-sector banks, the BS report said.

The promoter companies, rather than the listed group entities, would provide the guarantees, it added.

According to the banker cited by BS, the private-sector banks were negative on the proposal, and were likely to negotiate separately with the company.

Vodafone Idea Seeks More Debt

The funding is part of Vodafone Idea’s ₹35,000 crore fresh financing requirement for a ₹45,000 crore capital expenditure programme over the next three years, as per BS.

The plan includes expanding its 5G network across 17 priority circles, increasing earnings before interest, taxes, depreciation and amortisation (Ebitda), and rebuilding its subscriber base.

Of the ₹35,000 crore funding requirement, ₹25,000 crore is being sought through funded bank facilities, while ₹10,000 crore is proposed as non-funded facilities or lines of credit.

The company had already secured ₹6,400 crore in long-term bank facilities in the quarter ended June 2026.

Vodafone Idea CEO Abhijit Kishore said during the August 11 post-earnings analyst call that the company had made substantial progress with lenders across public-sector banks, private-sector banks and foreign lenders for external commercial borrowings, per BS.

The telecom operator reported a ₹3,750 crore net loss for the quarter ended June 2026, narrower than expected.

The government has also provided support to Vodafone Idea by converting about ₹37,000 crore of dues into equity, taking its stake to 48.99%.

The company’s shares have risen nearly 40% this year, giving it a market capitalisation of about ₹1.6 lakh crore, per BBG report.