Vodafone Idea (Vi), one of India’s major telecom operators, is actively pursuing a No Objection Certificate (NOC) from its lending consortium, led by the State Bank of India (SBI), as it moves to pledge its vast fibre optic network in a bid to raise Rs 7,000 crore.
The telecom operator plans to tap private credit and non-banking sources, as traditional bank funding remains elusive due to the company’s precarious financial position.
Vodafone Idea Plans Rs 7,000 Crore Fundraise via Fibre Asset Pledge
With a massive debt load of around Rs 2 lakh crore-primarily made up of deferred spectrum payments and adjusted gross revenue (AGR) liabilities owed to the government-Vi is seeking urgent capital to maintain network expansion and 5G rollout.
According to sources familiar with the matter as per ET report, the company’s proposal to leverage its 315,000 km fibre optic infrastructure is being evaluated by lenders, with the final approval still pending.
Half of Vi’s fibre network has been built in-house, while the remaining portion is operated through outsourced arrangements. Despite multiple attempts over the past six years to monetise these assets-through private equity deals and talks with US-based infrastructure funds-Vi has not been able to strike a deal. The last known valuation of the fibre network, made in 2023, placed it between Rs 10,000 crore and Rs 11,500 crore.
Vodafone Idea AGR Liabilities Loom Large
The move comes at a critical juncture for the telecom company. The four-year moratorium on AGR payments ends in September 2025. Starting March 2026, Vi is due to pay Rs 16,428 crore as the first instalment, with six annual tranches scheduled until FY31. The company’s total AGR liability is estimated at Rs 75,000 crore.
Vi CEO Akshaya Moondra has acknowledged the challenge, noting that banks are hesitant to offer further loans without clarity on the resolution of AGR dues. “Our request to the government has been to resolve this ahead of the March deadline,” Moondra said recently.
Capex Needs Mount as Vi 5G Rollout Continues
The company continues to push forward with its network expansion. As of now, Vi has launched 5G services in 22 cities, with plans to achieve full coverage across all telecom circles by September 2025. However, capital expenditure remains a critical need. The funds raised from the April 2024 equity infusion of Rs 20,000 crore are nearly exhausted, and fresh funding is essential to avoid falling further behind competitors Reliance Jio and Bharti Airtel.
Vodafone Idea Revenue Projections and Investor Sentiment
Vi has projected potential earnings of Rs 30,000 crore by FY27, contingent on a 10-year moratorium on its dues to the government. However, market experts have flagged this forecast as overly optimistic, given Vi’s current subscriber base, network limitations, and intense competition.
The company hopes that the GST reforms and expected festive season demand could help boost growth, but it remains heavily reliant on successful debt funding to sustain its operations in the near term.