Vodafone Idea in advanced talks with 3-4 PE funds for Rs 20,000 cr fund raise: Report

Vodafone Idea is in advanced negotiations with three to four private equity funds for raising about Rs 20,000 crore, the Department of Telecommunications (DoT) officials were told in a recent meeting with Aditya Birla Group chairman Kumar Mangalam Birla, Business Standard reported.

“We had a meeting with Birla who is one of the promoters of VIL and is spearheading the fundraise. We were told that negotiations are on with 3-4 private equity funds to raise money,” a telecom department official was quoted as saying in the report. The official added that no timeline has been discussed yet, adding that there are expectations that the telco will be able to “turn around”.

Vi’s efforts to raise Rs 20,000 crore through a mix of debt and equity have not materialised even after a year.

Vi requires a fresh capital infusion from its promoters as that is expected to lead to third-party equity funding. Such a scenario would also trigger the much-needed investments in Vi’s 4G network and towards its pending 5G rollout. But that hasn’t happened yet, which has resulted in lenders delaying refinancing of part of its existing bank debt. Vi ended the march quarter, FY23, with Rs 2.09 lakh crore net debt and a modest cash balance of Rs 230 crore.

The company’s promoters have been widely expected to infuse around Rs 5,000 crore of fresh capital in tranches after the government converted the telco’s accrued interest towards AGR arrears into equity in February this year and became its biggest shareholder with a 33.1% stake.

The telecom JV between UK’s Vodafone Plc and India’s Aditya Birla Group said in annual report for FY23 that it continues to actively engage with lenders and investors for further fundraising.

The telco is also in advanced discussions with various telecom equipment vendors for finalising its much-awaited 5G rollout strategy and it has concluded device testing of all major original equipment manufacturers (OEMs) on its fifth-generation network, as per the annual rpeort.

Vodafone Idea’s chairman Ravinder Takka has reiterated that the telco remains committed to ramping up 4G coverage and launching 5G. “The company will continue to make investments for expanding 4G coverage and capacity, especially in its 17 priority circles and introduce 5G services once funding is in place,” Takkar said in Vi’s latest annual report.