Vodafone Idea (Vi), a prominent telecom player in India, might be able to raise funds in the near future. The telco has term sheets from potential investors, the CEO informed the government. Akshaya Moondra, CEO of Vodafone Idea told the Department of Telecommunications (DoT) that a potential investor will also be seeking a meeting with the authorities soon to get assurances over whether the government will continue to support the company in the future or not.
According to an ET report, Moondra told DoT that the external fundraising would enable the company to go ahead with its plan of accelerated Rs 65,000 crore capex plan over the next four years to help the company turn around its situation. As per the report, Vi’s fundraising is imminent and could be closed within 7 to 10 days, said a senior government official.
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This would be the first successful attempt for the company to raise funds from external investors in years if it is able to close funding. Vodafone Idea is in desperate need of funds to clear the short-term dues as well as increase capex to compete with Jio and Airtel, who have now launched 5G in more than half of India.
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In FY26, the moratorium period for the AGR (adjusted gross revenue) and SUC (spectrum usage charges) dues will be over. From that year onwards, Vi would have to make payments to the tune of Rs 40,000 crore annually. That would put a serious strain on the cash flow of the telco. Thus, the telco needs to figure out its funding before that and try to turn around the business. Vodafone Idea's successful fundraising would also enable the company to figure out its 5G rollout plans.
Until and unless it raises fresh funds, the telco can't place commercial orders for 5G equipment, said the management of the telco. Vendors aren't comfortable exposing themselves further to Vi by providing equipment on credit.
