Vodafone Idea Limited (VIL), the third-largest telecom operator in the country is in need of more funds if it wants to scale capex (capital expenditure), believes Fitch Ratings. Vi's management has said that the capex would touch Rs 80 billion in the second half of FY25, which is almost 4x of what the telco spent in the first half. While Vodafone Idea already has the funds it raised through equity, there is still a need for more funds, which the telco has said will be raised through debt.
Read More - Vodafone Idea Family Postpaid Plan for Four People
But at the moment, banks are quite hesitant to board the debt ship with Vi again. While Vi's debt towards banks and lenders has reduced quite significantly over the last year, the telco still doesn't have full confidence from the banks for future debt. One of the key things that the lenders were waiting for was the Supreme Court decision on the AGR (adjusted gross revenue) dues matter. That didn't go the way the telcos wanted it to, and it was a blowback for Vi.
Vi's management has clarified numerous times that the strategy they had submitted to the banks never accounted for relief in the AGR dues in the first place. Vi's fundraising plans include raising about Rs 25,000 crore through debt.
Read More - Vi Added 100 Towers Every Hour to Expand Network
According to an ET report, Fitch Ratings said, "We believe Vodafone Idea will aim to ramp-up capex into its network to remain competitive, but its capacity to invest will be contingent on its ability to raise additional capital." The telco will largely use the revenue it generates to pay off debt, and the funds it is raising will go towards network upgradation and deployment.
Vi has already started scaling the networks, and the work is only going to speed up from here, asssured the management.
