Vodafone Idea confident of raising funds from SBI-led consortium: CEO

Vodafone Idea expects to close talks with an SBI-led consortium soon after promoter equity infusion and AGR relief improved its financial position

VI will receive ₹5,836 crore from Vodafone PLC as part of the revised CLAM settlement agreement in December last year, originally inked in 2017 during the merger of Vodafone India and Idea Cellular

Gulveen Aulakh

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Vodafone Idea’s top management is confident of closing the ongoing talks with a consortium of banks led by the State Bank of India (SBI) following the decision by promoters to infuse equity into the company. The No. 3 carrier’s Board is unlikely to see any change following the equity infusion and the contingent liability adjustment mechanism (CLAM) agreement, they added.

“We are deeply engaged with the SBI-led consortium, which is looking into it (fund raise), which forms part of the PSU banks, the private banks, as well as the foreign banks, and we are very confident of closing that very fast,” chief executive Abhijit Kishore said during the earnings call for the quarter ended March 2026 on Monday. He did not put a timeline to the closure of the discussions, where VI is looking to raise ₹35,000 crore, of which ₹25,000 crore will be funded and non-funded, or a rolling line of credit facility of ₹10,000 crore.

The funding is critical for the carrier, which has planned a capex of ₹45,000 crore for the next three years for rolling out 5G networks and strengthening its position amid competition by generating double-digit revenue growth, tripling its operating profit, and sustained subscriber additions.

On Saturday, the company said that Aditya Birla Group will infuse ₹4,730 crore through a preferential issue of up to 4.3 billion warrants to Singapore-based Suryaja Investments Pte Ltd. About 25 per cent will be paid upfront and the balance within 18 months, which will raise promoter stake by 3.82 percentage points from 9.6 per cent at present. The move comes close on the heels of Aditya Birla Group Chairman Kumar Mangalam Birla being appointed non-executive chairman of Vodafone Idea earlier this month. “I don't think there is any change that we are looking at in the board structure,” he said, while responding to questions from analysts on changes to the Board and shareholding. “These developments reaffirm the strong and continued commitment of the promoter group to our long-term growth,” he added.

VI will receive ₹5,836 crore from Vodafone PLC as part of the revised CLAM settlement agreement in December last year, originally inked in 2017 during the merger of Vodafone India and Idea Cellular. VI will get ₹2,307 crore in cash in the next 12 months. The balance will come from monetising 328 crore equity shares over the next five years. As of now, Vodafone PLC holds 16.07 per cent as part of the promoter holding in the carrier. Post conversion, the UK-headquartered telco’s share may fall to 15.5 per cent, while the Indian government’s share may decline to 47.1 per cent from the present 49 per cent, JM Financial said. Total promoter holding may rise to 28.5 per cent from 25.6 per cent now.

Brokerages said that the developments would enable closure of bank funding in the near term, pushing the beleaguered carrier into a better position. Citi Research said that AGR relief improved the company's net worth from negative ₹87,700 crore to negative ₹35,800 crore in a quarter and a 10-15 per cent tariff hike expected in the next three to six months could aid VI's revival.

In response to questions on VI being able to service spectrum payment obligations beyond FY28, management said that cumulative cash earnings before interest, taxes, depreciation, and amortisation (Ebitda) of about ₹60,000 crore between FY27 and FY29, debt raised from funded and non-funded provisions amounting to ₹35,000 crore, the CLAM settlement and income-tax refunds of ₹10,000 crore, along with promoter equity and an opening cash balance of ₹3,500 crore, totalling over ₹1 trillion over the next three years, would be able to take care of payments.

The company’s spectrum payment liabilities stand at ₹49,000 crore for the next three years, along with debt of ₹6,000 crore that needs to be serviced and capex of ₹45,000 crore, totalling about ₹1 trillion. VI has to pay ₹7,076 crore, ₹15,000 crore, and ₹27,000 crore in FY27, FY28, and FY29, respectively, against deferred payments for spectrum purchased before 2021.

VI recorded a net profit of ₹51,970 crore for the quarter ended March 2026 (Q4FY26) on the one-time accounting of relief through an exceptional gain of ₹58,116 crore owing to a reduction in adjusted gross revenue (AGR) dues. The government reduced AGR dues by 27 per cent to ₹64,046 crore with no further interest accrual. “This is a significant milestone and an important enabler for our ongoing engagement with lenders,” Kishore added.

While the telco narrowed losses on a like-to-like basis, it increased average revenue per user (ARPU), a key monthly metric of profitability recorded quarterly, to ₹190, up 8.5 per cent year-on-year, which the company said was the highest growth in the industry. On an absolute basis, VI lags the ARPU of peers, with Airtel leading at ₹257 and Reliance Jio at ₹214.

Kishore said that the carrier expected a 3-4 per cent upgrade from feature phones to smartphones and while it was keeping a watch on rising smartphone prices due to DRAM and NAND shortages, it was not seeing an immediate impact. “About 33 per cent of our base uses 2G handsets, it's a large opportunity. We’re putting up a 5G network in those areas, giving us the opportunity for them to upgrade to smartphones,” he said.

Kishore added that VI will raise marketing activities to be more visible amid competition and will focus on reducing customer churn, adding new customers through improved network coverage, and taking customers away from peers.

"We're also evaluating fixed wireless access (FWA) in select places; however, the larger focus continues to be on expanding 5G coverage," he added.

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First Published: May 18 2026 | 5:40 PM IST