Telecom service provider Vodafone Idea (Vi) 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.
Moondra said while talks with banks are advancing, it is likely to take more time before they conclude.
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.
These comments come days after Moneycontrol exclusively reported that the struggling telecom player has entered early discussions with private credit funds - including Davidson Kempner, Oaktree and Värde Partners - to raise a small tranche of debt.
“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.
While discussions with banks are progressing, they may take more time to close, he added. “...we are trying to look at other sources of funding which would be available in a shorter time frame.”
Moondra, whose tenure ended on August 18, said that talks with lenders have picked up again, after the government’s conversion of Rs 36,950 crore worth of dues into equity and a subsequent credit rating upgrade.
“What the banks are currently looking for is some clarity on the AGR front. So that is where we are engaged with the government, given that the government has made the conversion, they are today the largest stakeholder in the company…whether as an equity holder or any dues which are owed to any external party, we are quite confident that there will be a solution to AGR,” he said.
“In the past, we have always seen that government has been supportive. You look at 2019 deferment of spectrum installments, 2021 reforms package, 2023 and 2025 conversion of government dues to equity. Generally, they happen closer to the time when it is essentially needed,” Moondra said. “We are working towards tying up debt funding for the execution of our long-term network expansion plan.”
On capex, the outgoing CEO reiterated Vi’s earlier guidance of Rs 5,000-6,000 crore for the first half of FY26, most of which will be completed by September. He acknowledged delays in the 5G rollout but stressed that investments so far have strengthened the telco’s 4G competitiveness.
Moondra also said that the company can only support a limited portion of its capital expenditure through fresh funding. While it continues to generate some positive cash flow from operations after servicing debt - allowing for a bit of additional capex - the bulk of planned investments will still depend on securing new financing. With the capex already deployed and spending planned through September, Vi has reached a stage where its 4G network coverage is now highly competitive.
“So, while we look at a significant round of next capex coming from new funding, it is very clear that what we have already invested puts us in a much better competitive position, and we'll continue to leverage that as we move forward,” Akshaya Moondra added.
This quarter, Vodafone Idea’s efforts are centered on rolling out 5G and redeploying equipment, with some sites being scrapped and capacity upgrades on existing ones. The company does not anticipate any major increase in the number of sites in the near term, as any significant expansion will depend on fresh funding.
“That said, we will generate some cash internally, which will be invested, leading to a modest increase this quarter. In Q3 and Q4, as we deploy more of our internal cash flows, we should see further growth. But to reach a scale of around 2–2.5 lakh towers, new funding will be essential,” Moondra said.
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