MC EXCLUSIVE Vodafone Idea in advanced talks to raise Rs 5,000 crore, deal likely to close in next few weeks

Vodafone Idea in Advanced Talks to Raise ₹5,000 Crore, deal likely to close in next few weeks

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Vodafone Idea Ltd., the country’s third-largest telecom operator, is in advanced talks to raise about Rs 5,000 crore in debt financing as it works to shore up capital for its ongoing turnaround.

According to people directly aware of the matter, the debt will be raised by Vodafone Idea Telecom Infrastructure Limited, a group subsidiary that houses part of the company’s telecom infrastructure and renewable energy assets. The operator has appointed JM Financial as its advisor for the transaction, which is expected to close in the next fortnight.

The fundraise, if completed on schedule, would mark a critical step in Vodafone Idea’s long and difficult effort to restore financial stability. For years, the company has struggled under the weight of enormous liabilities and declining subscriber numbers, with its financial distress aggravated by the Supreme Court’s ruling on Adjusted Gross Revenue (AGR) dues.

While the government’s decision to convert more than Rs 53,000 crore of dues into equity provided some relief, fresh capital is still needed to maintain competitiveness in India’s three-player telecom market, dominated by Reliance Jio and Bharti Airtel alongside Vodafone Idea.

Industry watchers believe this fundraise will provide sufficient liquidity for Vodafone Idea’s planned network investments through the first half of 2026.

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Deborshi Chaki

Senior Editor – Corporate

According to the sources cited, the proceeds will be used primarily for capital expenditure on network expansion and for selective 5G rollouts, ensuring that the company continues to hold on to its share of India’s fast-growing data market. Vodafone Idea Telecom Infrastructure Limited was chosen as the vehicle for the fundraise to help ring-fence core infrastructure assets and attract investor interest in a structure that offers greater security than exposure to the main operating company.

Vodafone Idea and JM Financial are yet to respond to Moneycontrol queries.

Signs of recovery in Vodafone Idea’s subscriber performance have added momentum to these efforts. In the most recent quarter, the company’s churn fell sharply, with net subscriber losses down to about half a million.

This is a dramatic improvement from the average five million customers it had been losing in several quarters prior. While still trailing rivals in terms of additions and market share, the narrowing of losses is seen as an early indicator that operational measures, such as strengthening 4G coverage and improving customer service, are beginning to take hold.

Raising debt has not been easy for the company. Access to large-scale bank funding remains constrained because of the uncertainty around AGR liabilities, with annual payments of nearly Rs 18,000 crore scheduled to resume from March 2026.

That has forced Vodafone Idea to look to private sources of debt funding . Parallel talks with banks to secure over Rs 22,000 crore in loans have been revived, but lenders are awaiting clarity from the government and the regulator on how the AGR burden will ultimately be resolved.

Minister of State for Communications Chandra Sekhar Pemmasani, in an interview to Moneycontrol on August 25, has also made it clear that any additional relief to the company must be routed through the Union Cabinet, involving the Prime Minister’s Office, the Finance Ministry, and the Department of Telecommunications.

While the government is now the largest shareholder in Vodafone Idea, further concessions remain politically sensitive, given the potential implications for competition and revenue collections. In public statements, the Telecom Minister has said that Vodafone Idea’s revival is important for preserving a three-player market structure, but emphasized that investor confidence and private capital will be critical to sustaining the turnaround.

Industry watchers say the successful completion of this Rs 5,000 crore raise will be an important signal to markets and creditors that Vodafone Idea retains investor backing. It would also buy the operator crucial time to demonstrate operational improvement, attract additional funding, and prepare for the resumption of AGR payments. By choosing to route the fundraising through its infrastructure arm, the company is attempting to leverage the inherent value of its towers and renewable energy assets to build confidence among lenders.

The next few months will therefore be decisive for Vodafone Idea. The infusion of funds through Vodafone Idea Telecom Infrastructure Limited is expected to keep capital expenditure plans on track in the near term, but the long-term survival of the company will depend on larger debt and equity infusions, a sustained improvement in customer retention, and a more durable resolution of its regulatory liabilities. For now, however, the new financing round could provide a badly needed boost and reinforce the company’s effort to reclaim its place in India’s telecom industry.