The company could run out of funds to sustain its capex program by the end of the fourth quarter of FY26. Lenders remain cautious due to unresolved AGR dues.
At the risk of a cash crunch by March 2026, beleaguered telecom operator Vodafone Idea has reportedly initiated early-stage talks with private credit funds such as Davidson Kempner, Oaktree, and Värde Partners to raise a small tranche of debt.
According to a Moneycontrol report, Vodafone could run out of funds to sustain its capital expenditure program by the fourth quarter of the current financial year. Despite multiple discussions, lenders have so far refrained from extending new loans to the cash-strapped operator.
Where Can It Raise Funds From?
The debt-laden telecom major aims to raise funds by November 2025 to expand its 4G and 5G networks to prevent losing customers to rivals, Bharti Airtel and Reliance Jio. It has been seeking debt financing to support its broader capex plans of ₹50,000 – ₹55,000 crore, with a private credit option explored as a stopgap measure.
KPMG has reportedly submitted a revised Techno-Economic Viability (TEV) report to help them access ₹25,000 crore in bank loans.
However, lenders remain hesitant due to the lack of clarity on the adjusted gross revenue (AGR) dues and uncertainty over the repayment “waterfall” mechanism, particularly on whether government dues would be prioritized over bank loans since the Centre holds a majority stake in the company.
Challenges Ahead
Earlier this year, Vodafone Idea wrote to the Supreme Court stating that it would not be able to operate beyond FY26 without bank financing. The apex court dismissed the plea.
The situation is likely to worsen in September 2025 when the government’s four-year moratorium on AGR and spectrum payments ends.
From FY26, Vi will need to pay over ₹18,000 crore annually for six years, including ₹16,428 crore for AGR dues and ₹2,539 crore for deferred spectrum obligations in FY26 alone, the article mentioned. As of March 2025, Vi owed the government ₹1.94 lakh crore, including ₹1.18 lakh crore in deferred spectrum payments and ₹75,945 crore in AGR dues.
Q1 Estimates
All eyes are now on its June quarter (Q1 FY26) earnings print due on August 14.
According to reports, ICICI Securities expects Vodafone’s losses to widen to ₹7,141 crore. However, the topline may grow 1.1% QoQ and 6% YoY.
In the first quarter of fiscal 2026, promoters reduced their stake in Vodafone Idea by 13.23%. The telecom company sold a significant stake to the government of India in a bid to lower debt.
In other news, Vi signed agreements to acquire a 26% stake in Aditya Birla Renewables SPV 3, a special-purpose vehicle for operating a captive power plant, for ₹1.56 crore.
What Is The Retail Mood?
Retail sentiment on Stocktwits remained ‘neutral’ ahead of the Q1 results. It was ‘bullish’ a week earlier.
Vodafone Idea shares are currently trading 1.2% lower at ₹6.4.
YTD, the stock has lost nearly 1/5th of its value. In the past year, Vodafone Idea shares have slumped 60%.
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