Vodafone Idea eyes non-banking sources to fund capex cycle in short term

'Confident of solution to AGR', says outgoing CEO Akshaya Moondra

Vodafone Idea (Vi) is looking at non-banking sources for funding its capital expenditure (capex) cycle as a short-term solution, because banks may take time to proceed with debt-raise as they await clarity on the adjusted gross revenue (AGR) issue, said outgoing chief executive officer (CEO) Akshaya Moondra at the No 3 telecom operator’s (telco’s) earnings call on Monday. 

The non-banking debt-funding would, however, would be of a smaller amount, compared to the ₹25,000 crore Vi wants to raise from banks, Moondra said. 

“Given the fact that we are keen on maintaining continuity of our capex, which has been going on since last year, we are looking at non-banking sources of funding also. Not the full amount of ₹25,000 crore that we have talked about, but a lesser amount so that we can continue with the capex cycle,” said the top executive, whose long tenure at Vi ended on Monday. 

 

Moondra did not disclose the amount the telco intends to raise from the non-banking finance sources. The telco had raised ₹18,000 crore through an FPO (follow-on public offering) in April 2024, and had laid out plans to raise an additional ₹35,000 crore as external debt. The funds were required for its three-year capex plan of ₹50,000-55,000 crore, where it would roll out 5G services across all 17 circles where it owns spectrum. 

The telco’s capex would continue to be around ₹5,000-6,000 crore till September, which would get funded from the FPO proceeds of last year, but Moondra noted that the larger quantum of the capex would require new funding to come.

 

“In the third quarter (Q3) and Q4 as we kind of deploy some of our internal cash generation for capex, we will see some growth. But to get to a figure of 205,000 or 215,000 (sites), we will need new funding,” he added. 

 

He further said that while talks with banks were progressing, it would take some time for the funding to materialise. “Banking things are progressing, but they may take a little while, and we are trying to look at other sources of funding, which could be available in a shorter time frame,” he added.

 

Moondra expressed confidence that a solution to the AGR matter would be arrived at, going by past actions of the government, which came out with solutions to support the sector, including deferment of spectrum instalments in 2019, a reforms package in 2021, conversion of government dues to equity in 2023 and 2025. He noted that the company was engaged with the government for seeking relief on payment of these dues currently amounting to ₹75,000 crore.

 

“I think what the banks are currently looking for is some clarity on the AGR front. So, that is where we are engaged with the government. Given that the government has made the conversion, they are today the largest stakeholder in the company. Whether as an equity holder or any dues which are owed to any external party, we are quite confident that there will be a solution to AGR,” Moondra said.

 

Vi is seeking a faster solution before March 2026, when AGR payments come due. The telco has to pay ₹16,428 crore as AGR instalment by March 2026, and ₹2,641 crore as deferred payment obligations for spectrum bought in auctions by June 2026.

 

“Our request to the government has been that let us resolve this earlier than before the deadline of March, so that banks get clarity and we can proceed with bank funding. And that is our continuing effort today also,” Moondra said.