Vodafone Idea (Vi) is reportedly in advanced discussions with Apollo Global for raising up to $1 billion. The cash-strapped telco might offer a mix of debt and equity to the US private equity investor, said a Livemint report. Both the groups are in advanced discussions right now, and the announcement for the same might arrive from Vi later this month.
Vi has not been able to easily secure funding from outside investors. This was majorly due to the condition the telco was in and the policy environment in India, which made the telecom sector a dangerous gamble for equity investors. But since September 2021, the government and the Department of Telecommunications (DoT) have together offered the telecom sector multiple relief measures, which included a moratorium on spectrum payments.
Vodafone Idea Also Got Funds from Promoter Groups
Vi had also received fresh funds from the promoter groups recently. Three entities owned by the promoters of the company — Vodafone Group UK and the Aditya Birla Group (ABG) had infused Rs 4,500 crore as fresh capital into Vi.
Due to the mammoth dues the telco has, it has been unable to secure funding from outside investors. But if things go right this time, Vi would be able to raise about USD $1 billion from Apollo Global, a major US private equity investor.
Vi’s board had earlier approved fundraising of Rs 14,500 crore, out of which Rs 4,500 crore was supposed to come via promoters while the remaining Rs 10,000 crore was to come from the outside investors.
In addition to this, the Department of Telecommunications (DoT) had confirmed that it returned the bank guarantees (BGs) to the telecom operators for spectrum dues payments which are very far from now. Vi was supposed to get approximately Rs 15,000 crore worth of BGs back from the DoT. With the fresh cash flowing into the company, Vi would be able to expedite its 4G investments and also make fresh 5G spectrum purchase.