Vodafone Idea closing ₹35K crore SBI-led funding ‘very fast’: CEO | Company News

The top management of Vodafone Idea (Vi) is confident of closing the ongoing talks with a consortium of banks led by the State Bank of India (SBI) following the promoters’ decision to infuse equity into the company.

The board of India’s No. 3 carrier is unlikely to see any change following equity infusion and the contingent liability adjustment mechanism (CLAM) agreement, according to the management.

“We are deeply engaged with the SBI-led consortium — comprising public sector banks, private banks as well as foreign banks — and we are very confident of closing that very fast,” Vi Chief Executive Officer (CEO) Abhijit Kishore said on Monday during the earnings call for the fourth quarter of 2025-26 (Q4FY26).

Kishore, however, did not put a timeline for the closure of the discussions where Vi is looking to raise ₹35,000 crore.

The funding is critical for the carrier that 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.

The move came close on the heels of Aditya Birla Group Chairman Kumar Mangalam Birla being appointed as non-executive chairman of Vi earlier this month.

“I don’t think there is any change that we are looking at in the board structure,” Kishore said, 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 from Vodafone PLC as part of the revised CLAM agreement of December 2025. It was originally inked in 2017 during the merger of Vodafone India and Idea Cellular. Vi will get ₹2,307 crore cash in next 12 months. The balance will come from monetising 3,280 million equity shares over the next five years. As of now, Vodafone PLC holds 16.07 per cent as part of promoter holding in the carrier. After 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 present 49 per cent, said JM Financial. 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 to a better position.

Citi Research said that the AGR (adjusted gross revenue) relief improved the company’s net worth from negative ₹87,700 crore to negative ₹35,800 crore in a quarter, and that 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, the management said cumulative cash Ebitda of about ₹60,000 crore between FY27 and FY29, debt-raise from funded and non-funded provisions coming to ₹35,000 crore, CLAM settlement, and income tax refunds of ₹10,000 crore, along with promoter equity, plus opening cash balance of ₹3,500 crore, totalling over ₹1 trillion over the next three years, will be able take care of payments.

The company has spectrum payment liabilities of ₹49,000 crore for the next three years, 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 Q4FY26 on the one-time accounting of relief on an exceptional gain of ₹58,116 crore due to reduction in 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 (Y-o-Y), which the company said was the highest growth in the industry. On an absolute basis, Vi lags Arpu of peers, with Airtel leading at ₹257 and Reliance Jio at ₹214.

Kishore said the carrier expected a 3-4 per cent upgrade from featurephones to smartphones and while it was keeping a watch on rising prices of smartphones due to memory chip shortages, it was not seeing an immediate impact. “About 33 per cent of our base uses 2G handset, it’s a large opportunity. We’re putting up a 5G network in those areas, giving 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 through mobile number portability that accounts for 47 per cent customer acquisitions on an industry level.

“We’re also evaluating fixed wireless access (FWA) in select places. However, larger focus continues on expanding 5G coverage,” he added.