Vodafone Idea in talks with up to four PE firms to raise Rs 20,000 crore: Report

For representational purpose.

Cash-strapped Vodafone Idea Ltd (VIL) is in advanced talks with three to four private equity funds to raise about Rs 20,000 crore, senior officials of the department of telecom (DoT) were told during a recent meeting with Aditya Birla Group Chairman Kumar Mangalam Birla.

“We had a meeting with Birla, one of the promoters of Voda-Idea, to discuss raising capital. We were told that talks are on with 3 to 4 private equity investors to raise money. Though no timeline for raising capital was discussed, we are confident that the company will be back on track very soon,” a top DoT official told the Business Standard.

When asked whether Birla had asked for any more concessions on the repayment of VIL’s dues to the government, such as converting a part of the dues into equity, the official said: “No such proposal has been discussed so far.”

A major part of the VIL’s dues to the DoT comes up for payment in FY26.

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The assurance from a key telco promoter assumes significance as there are concerns about an adverse impact on Vodafone Idea because of the delay in raising capital. Also, without adequate capital, the company cannot either start 5G services or expand its 4G services. VIL has covered 90 percent of the country while its rival firms have a pan-India network.

Reports surfaced that New York-based KKR and Singapore-based Temasek Holdings were among the private equity funds with which Vodafone Idea has had talks. However, both these companies declined to comment on the matter. Earlier, a major hurdle for investors was that they were asked to wait till the government converted a part of its dues into 33 percent equity in the telco, making it the single largest stakeholder, according to the financial daily.

After a delay of about 16 months, the process was completed in February 2023 when the government converted Rs 16,133 crore worth of interest payments into equity. With this, the way was cleared for talks with potential investors. The conversion of debt into equity helped the company marginally in reducing its debt. Vodafone Idea still has a debt of Rs 2.1 lakh crore.