Vodafone Idea rules out fresh equity infusion, bets on loans and AGR relief for turnaround

On spectrum liabilities, the company made clear it is not seeking any moratorium or deferment from the government

• Vodafone Idea not seeking fresh equity; relies on loans and promoter support
• Company targets Rs 45,000 crore capex over 3 years, backed by bank funding
• AGR dues reassessment ongoing; spectrum payments to be made through cash flow, loans.

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Vodafone Idea is not looking at fresh equity infusion at this stage and believes its current funding roadmap, backed by bank loans, promoter support and adjusted gross revenue (AGR) relief, is sufficient to execute its three-year turnaround plan, CEO Abhijit Kishore said, even as the company awaits the outcome of a reassessment of its Rs 87,695 crore AGR dues.

Responding to investor queries, Kishore said the telecom operator is targeting Rs 25,000 crore in bank funding and Rs 10,000 crore in non-funded facilities to support its planned Rs 45,000 crore capital expenditure over the next three years.

With annual EBITDA of around Rs 9,200 crore, the company’s debt-to-EBITDA ratio stands at roughly 2.5x — a level, he said, is manageable for an infrastructure-heavy business.

“We are not looking at equity at this point in time,” Kishore said. “Two years later, we will evaluate how the situation evolves. But today, we believe we have adequate funding through the instruments we have outlined.” He added that both promoters remain committed and engaged in the business.

Speculation about a potential equity raise or induction of a strategic investor has persisted given Vi’s leverage and upcoming liabilities. However, management indicated that internal cash flow improvement, operational efficiencies and incremental debt will support both network investments and statutory obligations.

A key factor underpinning that confidence is the AGR relief framework under which the company’s dues have been frozen at Rs 87,695 crore as of December 31, 2025, with a staggered, back-ended repayment schedule over 10 years.

At the same time, a reassessment of AGR dues for the period FY07 to FY19 is underway. “The reassessment has started and is progressing at a very encouraging pace,” Kishore said, declining to provide a timeline or indicate the potential quantum of relief. “We have all the supporting documents and are deeply engaged at multiple levels.”

Chief Financial Officer Tejas Mehta said about Rs 80,000 crore of AGR dues are already recognised on the balance sheet, with the balance disclosed as contingent liability in line with the frozen amount. He termed it premature to estimate the outcome of the reassessment.

On spectrum liabilities, the company made clear it is not seeking any moratorium or deferment from the government. Over the next three years, Vi faces spectrum payment obligations of about Rs 49,000 crore — approximately Rs 7,000 crore in the first year, Rs 15,000 crore in the second and around Rs 27,000 crore in the third.

“We are not seeking any moratorium on spectrum liabilities. That is already built into our cash flow planning,” Kishore said. “Over the next three years, we have spectrum dues of around Rs 49,000 crore, and we are comfortable servicing them.”

Management said spectrum payments will be met through a combination of improving EBITDA, internal cash generation and planned bank funding. The company has set a target of tripling EBITDA over three years, driven by subscriber stabilisation, customer upgrades and capex-led revenue expansion.

“With EBITDA expansion, operational efficiencies and bank funding, we believe we are in a comfortable position to service both spectrum payments and capex,” Kishore said. “Spectrum payments are part of our committed financial roadmap.”

The Rs 45,000 crore capex programme — in addition to around Rs 18,000 crore already invested over the past six quarters — will be front-loaded, with higher spending in the first two years to accelerate network rollout and returns. Roughly 70% of the outlay will be directed toward radio access, with the remainder allocated to transport and core network infrastructure.