Vodafone Idea (Vi) has restarted discussions with banks to raise debt amid mounting financial stress driven by adjusted gross revenue (AGR) dues. The financially troubled company is planning to raise around Rs 22,000 crore for capex use, the Economic Times reported.
The banks so far have been in wait-and-watch mode as Vi sought legal relief from the Supreme Court.
“While banks had not factored in any relief on Vodafone Idea’s AGR dues, they have been awaiting greater clarity on the final liability before firming up fresh lending of over Rs 22,000 crore...Lenders were closely watching for resolution on the total AGR burden, even as they evaluated the company’s proposal to raise bank funding for capex use,” the Economic Times reported, citing a source.
The telecom giant had started debt-raising discussions with banks last year, but the talk had stalled due to uncertainty surrounding Vi’s AGR dues. The company at that time had held discussions with a consortium of banks to avail Rs 35,000 crore loans, including Rs 10,000 crore in non-fund-based credit. Earlier as well, the company had planned to fund capex to revive itself, including 4G coverage expansion and the rollout of 5G services across India and compete against rivals including Reliance Jio and Airtel. The banks had completed the techno-economic evaluation (TEV).
The development comes days after the SC rejected Vi’s plea that sought a Rs 45,000 crore AGR-related dues waiver. The dues comprised of a penalty, interest and interest on the penalty.
Vi’s Capex Investment Plan
The telecom sector giant had planned to infuse Rs 50,000-Rs 55,000 crore in capital expenditure through the financial year 2028. The company raised around Rs 26,000 crore via equity, including Rs 4,000 crore from vendors. The company, as of December 31, 2024, had a cash and bank balance of Rs 12,090 crore and has earmarked it for capex.
