Vodafone Idea gets Rs 2,000 crore from HDFC Bank; meets SUC payment obligations

In a recent statement, Chief Executive Akshaya Moondra confirmed that the promoters are committed to investing an additional Rs 2,000 crore in the company.

HDFC Bank, India's largest private sector lender, has extended a loan of Rs 2,000 crore to Vodafone Idea (Vi) to assist the beleaguered telco in addressing its pending license fees and fulfilling its 5G spectrum payment commitments.

The loan has a tenure of two years and the funds were disbursed in mid-September, just before the deadlines for some of the company's loan and statutory payment commitments, The Economic Times said in a report on November 2.

Vi has already paid more than Rs 350 crore for FY22 and FY23 in past licence fees and about Rs 1,700 crore toward spectrum usage charges (SUC). The company is also in talks with potential investors for equity funding.

Moneycontrol could not independently confirm the report.

A promoter group entity of Vodafone Idea Ltd (VIL) has assured assistance of Rs 2,000 crore to the company, if it requires financial support to meet the impending payment obligations, stated a regulatory filing made by the telecom operator on August 14.

As of June 30, 2023, Vi has reported gross debt of Rs 2.11 lakh crore. However, the company has paid all statutory dues till the second quarter of 2022-23 and is now clearing licence fees and spectrum usage charge (SUC) dues for the third quarter of the last fiscal at a faster pace than the earlier committed payment plan.

In a recent statement, Chief Executive Akshaya Moondra confirmed that the promoters are committed to investing an additional Rs 2,000 crore in the company. This investment is expected to come in alongside external investments and will help the telco settle its spectrum dues by the end of March. Moondra anticipates that discussions relating to equity investments will conclude this quarter.

Moondra also mentioned that the company is in talks with various network vendors to finalize its rollout strategy. However, significant capex towards networks will only be made after funding is secured. The company is asking its equity partners to use some of the funding proceeds to pay up outstanding vendor dues, while also aiming to quicken the pace of paying up outstanding dues to vendors.

The telecom services operator on October 26, reported a net loss for the quarter ended September of Rs 8737.9 crore against Rs 7595.5 crore in the same quarter last year.

Its revenue from operations stood at Rs 10,716.3 crore, rising 0.95 percent from 10,614.6 crore in the corresponding quarter, the company said in an exchange filing. Revenue was driven by better subscriber mix and 4G subscriber additions.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) of the company rose from Rs 4,097.5 crore to Rs 4,282.8 crore. EBITDA margin improved 140 basis points year on year to 40 percent.