Vodafone Idea (Vi) might not get any fresh loans from the banks. The struggling telco is looking for a fresh loan of about Rs 7000 crore to clear most of the dues of Indus Towers. But even the lenders now first want to wait and see if the promoters are pitching in any fresh capital into the company. This is what the Indian government is waiting for as well. It looks like that until promoters infuse a significant amount of capital into the company, its boat is not going to move forward. A report from Reuters said that a top official from a state-owned bank said that without capital injection, it would be hard for the company to survive.
What will Happen to Vodafone Idea?
It is difficult to predict what will happen, but one thing is for sure, things need to move fast in order for Vi to be able to raise fresh funds. The telco needs money, and it needs it fast. There are dues that need to be paid, and then network expansion plans need to be funded so that Vi can catch up with the competition.
The promoters of the telco are ready to invest money. However, it is to the tune of just about Rs 3000 to Rs 4000 crore. But that won't cut it for the company as it needs about Rs 40,000 to Rs 45,000 crore. Ashwini Vaishnaw, union telecom minister, on Thursday said that Vi needs capital and who will pitch how much capital is what needs to be seen. Kumar Mangalam Birla, the Chairman of Aditya Birla Group, one of the promoters of Vi, reached out to Vaishnaw to expedite the equity conversion process.
It is unlikely that the government would make any moves towards equity conversion until and unless Vi's promoters infuse the required capital into the company.