Vodafone Idea in Talks with Private Credit Funds Amid Uncertainty over Bank Financing: Report

Vodafone Idea (Vi) has initiated preliminary discussions with private credit funds, including Davidson Kempner, Oaktree and Varde Partners, to raise a small tranche of debt as it stares at a potential cash crunch by the March 2026 quarter. The private credit route is being explored as a stopgap measure while larger bank funding remains uncertain, according to Moneycontrol, which cited sources.

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Also Read: Banks Hesitant to Extend Fresh Loans to Vodafone Idea After AGR Verdict

Bank Loans Uncertain

Internal estimates indicate that the cash-strapped telecom operator could exhaust the funds needed to sustain its capital expenditure programme by the fourth quarter of the current fiscal year if bank loans do not materialise. Despite repeated engagements, lenders have refrained from extending fresh credit, with the company’s broader capex plans pegged at Rs 50,000–55,000 crore. Vi is targeting a November deadline to secure funding to avoid disruption to its 4G and 5G network expansion, which is critical to curbing customer churn.

KPMG has submitted a revised Techno-Economic Viability (TEV) report in July to support Vi‘s efforts to secure Rs 25,000 crore in bank debt. However, according to sources cited in the report, bankers remain cautious, citing the absence of clarity on adjusted gross revenue (AGR) dues and uncertainty over the repayment priority mechanism, particularly whether government dues will take precedence over bank loans, given the Centre’s majority stake.

Lenders have sought explicit comfort from the government on this point before proceeding, sources added.