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Highlights
- Vodafone Idea Limited (VIL), the third-largest telecom company in India, is looking to raise Rs 35,000 crore from the banks, and it may soon be able to.
- The banks are siding with Vodafone Idea's projections of revenues, but want more commitment from the promoters.
- The banks have said that Vodafone Idea promoters need to put in more capital, or have to commit to do it in the future.
Andrew Bonwick
Vice President of Product Development at Relm Insurance
Madhav Sheth
CEO of Ai+ Smartphone
Stephen Rose
CEO Render Networks
Vodafone Idea Limited (VIL), the third-largest telecom company in India, is looking to raise Rs 35,000 crore from the banks, and it may soon be able to. The banks are siding with Vodafone Idea’s projections of revenues, but want more commitment from the promoters. The banks have said that Vodafone Idea promoters need to put in more capital, or have to commit to do it in the future. Vodafone Idea promoter Aditya Birla Group (ABG) recently put in some capital into the company. This money will be used to scale the network infrastructure of the telecom operator.
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Vodafone Idea Fresh Round of Funding
Banks are waiting for more comfort from the promoters of Vodafone Idea. After the promoters say or confirm that they will infuse additional capital into the telco explicitly, banks will give money to Vi. This money will especially help Vodafone Idea in ensuring its 5G capex (capital expenditure) plans are met.
Vodafone Idea has been stuck with raising funds. The telco has mantained quarter after quarter that it has been in constant discussions with the banks. The fund raise will be via debt. To this extent, Vodafone Idea has been clearing its bank dues fast. The reason likely is to be able to raise more money through the banks.
The Aditya Birla Group is infusing Rs 4,730 crore as additional capital into Vodafone Idea. Out of this, over Rs 3,000 crore will be used to pay the existing loans and adjusted gross revenue (AGR) dues. For network expansion and capex needs, the remainder Rs 1,730 crore will be used. This will help Vodafone Idea in improving the network experience for customers and enable it to compete with Bharti Airtel and Reliance Jio. Vodafone Idea shares are trending at Rs 13.61 a piece, down almost a percent on Monday morning. Stay tuned to TelecomTalk for more updates around this.
