Telecom operator Vodafone Idea (Vi) is exploring non-banking sources of capital to support its ongoing capex cycle, as talks with banks remain slow due to uncertainty over adjusted gross revenue (AGR) dues. Outgoing CEO Akshaya Moondra made the remarks during the company’s June-quarter earnings call on August 18.
Looking Beyond Banks for Funding
Moondra said while negotiations with lenders have picked up following the government’s conversion of ₹36,950 crore dues into equity and a subsequent credit rating upgrade, banks remain cautious until AGR clarity emerges.
“Given our focus on maintaining capex continuity since last year, we are evaluating non-bank funding options. It may not be the full ₹25,000 crore we’ve discussed earlier, but a smaller tranche to keep the capex momentum going,” Moondra said.
Vi has also formally urged the government to resolve the AGR issue before the March 2026 deadline, which the company believes would reassure banks and unlock financing support.
Discussions with Global Credit Funds
Earlier this month, reports indicated that Vi had entered early talks with private credit funds such as Davidson Kempner, Oaktree, and Värde Partners to raise a smaller debt round. Moondra confirmed that the company is seeking quicker alternatives, given that bank discussions are likely to take longer.
Government Support Crucial
Highlighting past relief measures, Moondra expressed confidence that the government would extend support again if needed.
“In 2019, spectrum installments were deferred; in 2021, reforms were introduced; in 2023 and 2025, dues were converted into equity. These steps typically come when most required, and we expect a solution on AGR as well,” he said.
Capex and 5G Rollout Plans
- Capex Guidance: ₹5,000–6,000 crore for H1 FY26 (mostly by September).
- Focus: Strengthening 4G competitiveness and beginning 5G rollout.
- Internal Cash Flows: Supporting only a limited portion of planned capex.
- Network Expansion: Modest near-term upgrades; major tower expansion (2–2.5 lakh towers) dependent on new funding.
Moondra acknowledged delays in 5G rollout but stressed that recent investments have significantly enhanced Vi’s 4G network coverage and competitiveness.
“With the investments already deployed, we’re in a stronger position and will continue leveraging that as we secure fresh funding for the next phase of expansion,” he said.
What’s Next for Vodafone Idea
Vi plans to continue redeploying equipment, upgrading capacity on existing sites, and gradually scaling 5G. However, major growth in network infrastructure hinges on securing new funding — whether from banks, the government’s support on AGR, or non-bank lenders.
