Vodafone Idea unit in talks to raise $570 million via short-term bonds

India's Vodafone Idea Telecom Infrastructure, a wholly owned subsidiary of telecom operator Vodafone Idea, is in talks to raise up to 50 billion rupees ($569.5 million) through a debt sale in September, three sources familiar with the matter said on Tuesday.

The unit of India's third-largest wireless carrier plans to issue bonds with tenors of two and three years, raising ₹30 billion and ₹20 billion, respectively, the sources said.

The company is expected to tap private credit funds for the issue, and offer coupons of around 12 per cent and 14 per cent on two-year and three-year bonds, two of the sources said.

 

"The funds would be used for fresh capex as the company wants to expand," one of the sources said.

All the sources requested anonymity as they are not authorised to speak to media. Vodafone Idea declined to comment on the matter.

In May, Vodafone-Idea, led by billionaire Kumar Mangalam Birla, received board approval to raise ₹200 billion through equity or loans.

The company also aims to further expand its 5G services to additional key cities across 17 priority circles by September 2025, it said on an earnings call earlier this month.

Vodafone Idea has struggled to pay outstanding spectrum and revenue-sharing dues since a landmark 2019 Supreme Court ruling widened the definition of revenue used to calculate payments.

To support the loss-making carrier, the government in April converted part of its spectrum dues into equity, raising its stake in the company to 48.99 per cent.