Vodafone Idea (Vi), the third-largest telecom operator in the country, is trying to raise funds via debt from the banks. However, the banks have been pretty cautious about exposing themselves further with Vi. The telco's capex projection for the coming years depends heavily on its ability to raise money via debt. To that extent, Vi's lucky may change soon. The company has been eyeing to raise about Rs 25,000 crore from the lenders. Much recently, ICRA had boosted the rating of Vi from BB+ to BBB-. Now, even CARE ratings has done the same. The boost in credit rating from multiple agencies will aid Vi in being able to raise funds from the banks.
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This is an investment grade rating for Vi, a necessary rating for the banks to even consider lending money to a company. The money, if Vi is able to raise it, will help the company in boosting its infrastructure across India and compete with the likes of Bharti Airtel and Reliance Jio.
With the funds from the debt, Vi will be able to improve its financial situation. The company has made it clear in the past that it will use the funds it is raising for investments into networks. The revenues that are flowing in will go towards clearing liabilities. The liabilities of Vi are now reducing pretty fast, especially as the government converted a major chunk of AGR (adjusted gross revenue) related dues into equity for itself.
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There's no clear timeline for when Vi will raise this money, but the telco would want it to happen as soon as possible. The company has mentioned that it is engaged in discussion with banks for some time.
