Punjab National Bank Not Looking to Increase Exposure to Vi

Vodafone Idea Limited (VIL) is unlikely to get any fresh lending from the Punjab National Bank (PNB). The bank has an exposure of Rs 300 crore towards Vi (Vodafone Idea). The bank’s not looking to give any more loans to Vodafone Idea currently, it confirmed recently. Ashok Chandra, Managing Director (MD) and Chief Executive Officer (CEO) of the bank said in the recent earnings call, “PNB has ?300 crore exposure to Vodafone, and as of now, we have not explored any further exposure in this particular account.”

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Why this matters at the moment is because Vi was recently granted a major relief in the payments of the adjusted gross reveue (AGR) dues. The funds that the telco is looking to raise are for fuelling capex (capital expenditure). The major part of the AGR dues will now be payable for Vi only from 2036.

Vodafone Idea has been looking to raise about Rs 20,000 crore – Rs 25,000 crore via debt instruments for the last year. The board has already approved the fundraise. But the telco was stuck with no clarity around the AGR dues payments. Now since that clarity is there, banks and financial institutions can make a decision of whether they want to expose themselves to Vi further or not.

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Vodafone Idea is struggling right now due to lack of funds and customers leaving its networks. Raising money would mean that the telco can continue with 4G and 5G expansion and also modernise network infrastructure. Vi needs more cash than what it is making through its operations to keep growing its business and also taking care of the expenses. The DoT is also reassessing the AGR dues amount that will be payable by Vi starting from 2036. So we could potentially see a lower amount here.