Vodafone Idea Edges Closer To SBI Funding, Disbursal On Hold

Vodafone Idea (Vi), India's third-largest mobile telecom operator, appears to have moved a step closer to securing funding for its capital expenditure plans, with State Bank of India (SBI), the country's largest lender, agreeing to sanction its portion of the loan, according to a Business Standard report.

The development follows the Aditya Birla group-backed telecom company's decision to offer guarantees through its promoter entities, something it had not agreed to earlier and which had stalled talks, the report said.

Despite the progress, SBI is not expected to release the funds until Vodafone Idea also secures the remaining portion of the loan from private-sector banks, the report noted.

A senior banker cited in the report said the process had reached a favourable stage and was expected to move forward. According to this person, it is the promoter companies, and not the larger listed group entities, that will offer the guarantees, since the listed firms are unwilling to do so. The banker added that while these guarantees may not cover the entirety of SBI's exposure, the size of which remains undisclosed, they offer an added level of assurance. Vodafone Idea had requested that the guarantees be lifted after four years if the company's performance remains on track, a condition SBI has reportedly agreed to.

As of March 2026, promoters held a combined 25.64% stake in Vodafone Idea, with Vodafone Group Plc owning 19% and the Kumar Mangalam Birla-led Aditya Birla group holding 6.63%. The Government of India owns close to 49% of the company but is treated as a public shareholder rather than a promoter.

The banker further said private-sector lenders remain unenthusiastic about the proposal and are likely to negotiate their terms separately with the company. Vodafone Idea will need to engage with every lender individually to secure the full funding, the person said, adding that some public-sector banks are expected to participate, though the exact contribution from each remains unclear. The proposal cannot proceed unless all lenders sanction their respective shares, the report said.

The Funding Requirement

The matter concerns ₹35,000 crore in fresh funding that Vodafone Idea is seeking to support a broader ₹45,000 crore capital expenditure plan spread over the next three years. The plan covers a 5G rollout across 17 priority circles, an effort to triple the company's earnings before interest, taxes, depreciation and amortisation, and steps to strengthen its subscriber base to support revenue growth. Of the total amount sought, ₹25,000 crore has been requested from banks as funded facilities, while the remaining ₹10,000 crore has been sought as a line of credit.

The company had already secured ₹6,400 crore in long-term bank facilities during the quarter ended June 2026. Vodafone Idea CEO Abhijit Kishore said on a post-earnings call on August 11 that the company remained engaged with lenders across three groups and had made considerable progress. He identified these groups as six to seven public-sector banks led by SBI, Indian private-sector banks, and a set of foreign banks providing external commercial borrowings.

While SBI has found the terms acceptable and is set to process its share of the loan, other lenders have also been briefed on the proposal. Each will need to complete its own internal approval process and secure board clearance before proceeding. The banker reiterated that SBI's funds would only be released once all lenders had approved their respective portions, since partial funding is not workable for a capital expenditure plan of this scale.

Kishore had earlier said the company was hopeful of concluding discussions with public-sector banks led by SBI, while continuing to pursue other debt funding options. Bank funding is seen as important for Vi as it plans to step up capital spending in FY27. After receiving its first tranche of funds, the company had placed equipment orders worth ₹9,000 crore with network vendors including Ericsson, Nokia and Samsung for its 5G rollout.

In the company's FY26 annual report, Aditya Birla Group Chairman Kumar Mangalam Birla noted that investor and lender confidence had strengthened during the year, pointing to the ₹3,300 crore raised through non-convertible debentures ahead of the adjusted gross revenue resolution as a sign of continued promoter support.