Debt Funding: Vodafone Idea CEO says lenders in wait-and-watch mode, awaiting clarity on AGR issue

Vodafone Idea

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26 Aug, 2025 12:21

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Vodafone Idea chief executive officer (CEO) Akshaya Moondra has said lenders are in a wait-and-watch mode on the telco’s debt-funding plans and are awaiting the government's response to pending dues.

The company is optimistic about securing debt funding from its lenders once the government provides clarity on the adjusted gross revenue (AGR) issue, Moondra said on November 14 during an earnings call.

“As any interested party, the lenders are also looking at what is happening on the AGR matter. However, it was not a part of our business plan that we submitted to them for debt funding. So we are engaged with the banks…I, along with my promoters, are engaged with the bank and we should be able to close once some clarity emerges as to what is happening on the AGR,” he said.

Vodafone Idea was seeking the government’s support after the Supreme Court’s decision did not favour re-computing of AGR dues.

“...till this curative petition was dismissed, things were progressing as we had expected. I think it will probably take a while to get some clarity…I think they [banks] are also seeing that since the engagement is on what is happening in that direction,” he added.

The government is committed to having three private telecom operators and recognises the merits of the curative petition filed by telecom operators even though the court has not provided any relief, the CEO said.

In September, the Supreme Court rejected 19 petitions filed by 19 telecom operators, including Bharti Airtel and Vodafone Idea, to recalculate AGR dues. The ruling was a big blow for these companies, especially Vodafone Idea, which is cash-strapped and owes the government thousands of crores in fees.

As part of the revival plan, the company has raised equity of Rs 24,000 crore this year, including Rs 18000 crore in India’s largest FPO. It is looking for a fund-based facility of Rs 25,000 crore and a non-fund-based facility of Rs 10,000 crore fundraising completed in 2024.

The telco has outlined a capex plan of Rs. 50,000– 55,000 crore over three years, executed through debt fundraising and equity raises.

It also talking to the government on the waiver of bank guarantees worth Rs 24,746.9 crore required to be submitted 13 months in advance of spectrum payment due between October 2025 and September 2026.

Moondra said the demand is not just from Vodafone Idea but also from other telcos.

“We believe the rationale is understood…We and the entire industry have requested that the bank guarantee be done away with…Our representation to the government is that if it has been done away with future options, then why do we need to keep it for the past auctions and it should be done away with,” he said.

The requirement is reducing the ability of telcos to obtain debt-funding from banks. “So it is very clear that banks guarantee is something which the banks themselves will not be very willing to offer,” he said.

The company was trying to get debt funding that will go towards making investments, which will help improve its performance and cash generation.

The company also said that any reduction in the AGR liability was not a part of Vodafone Idea’s business plan submitted to the banks, based on which the techno-economic evaluation (TEV) was done by an external agency and submitted to the bank.

Vodafone Idea has to pay Rs 27,230.3 crore for deferred spectrum instalments from October 20, 2025 to March 31, 2026 and adjusted gross revenue instalments of March 31, 2026.

The company expects that in case of cash shortfall, the amount due to the government can be converted into equity.

Vodafone Idea narrowed its consolidated net loss in the September quarter to Rs 7,176 crore from Rs 8,737 crore last year. Its revenue from operations increased 2 percent to Rs 10,932 crore.

Customer ARPU (ex M2M), a key performance indicator, improved to Rs 166 from Rs 154, up 7.8 percent on a sequential basis, driven by tariff hike. Mobile ARPU rose to Rs 156 from Rs 142 a year ago and Rs 146 in the previous quarter.