The central government is looking for a strategic investor who is willing to commit $1 billion (over Rs 8,800 crore) into debt-ridden Vodafone Idea for a 12-13 percent stake, the Economic Times reported citing people familiar with the matter.
Promoters Aditya Birla Group (ABG) and UK's Vodafone will have the option to dilute some of their stake as the government wishes to remain invested in the telecom giant for some more time, the report added citing sources. The government wishes that the new investor takes Vodafone Idea forward with new ideas as well, it further said.
This is one of the many ways, including AGR relief, that the government is exploring in order to save one of the largest telecom companies in India from shutting down, the report said. The government has identified some potential suitors, and talks are likely to pick up pace in the near future, the report further said.
Moneycontrol couldn't independently verify the report.
Vodafone Idea has been struggling with debt, owing nearly Rs 83,400 crore in adjusted gross revenue (AGR) dues, with annual payments of around Rs 18,000 crore scheduled from March 2025.
The debt-laden operator has repeatedly warned that it cannot survive without funding support, as banks remain wary of lending, given its financial stress. Vi employs over 18,000 people and has nearly 198 million subscribers.
The telecom service provider is exploring non-bank avenues to fund its capital expenditure plans, as negotiations with lenders remain stalled due to uncertainty over adjusted gross revenue (AGR) dues, outgoing CEO Akshaya Moondra said on August 18 during the June quarter earnings call.
Vi has also formally urged the government to settle the AGR matter ahead of the March 2026 deadline, which Moondra said would help reassure banks and unlock financing support.
"Given the fact that we are keen on maintaining a 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 Rs 25,000 crore that we have talked about, but a lesser amount so that we can continue with the capex cycle," Moondra said.
After the report on government looking for a potential investor in Vi was published, the shares of the company surged nearly 6 percent to hit an intraday high of Rs 6.94 apiece. However, it pared some of the gains by the end of the session to close at Rs 6.61 apiece (up 0.61 percent).
Vodafone Idea shares have fallen more than 3 percent in the past one month, and over 11 percent in the past six months. The stock is down around 17.5 percent in 2025 so far.
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