Struggling telecom operator Vodafone Idea (Vi) is facing a fresh challenge in securing a crucial ₹25,000 crore loan as top lenders, including the State Bank of India (SBI), remain undecided on approving the request. The funding is vital for the debt-laden telco to execute its delayed 4G expansion and upcoming 5G rollout.
🏛️ What’s Holding Banks Back?
According to sources familiar with the matter, banks are seeking:
Clear guarantees on government support
A solid revenue growth roadmap post-fund infusion
Equity participation by promoters before committing large credit lines
Many lenders are cautious due to Vodafone Idea’s weak financials and prior history of defaults. SBI, which often leads loan consortiums for telecom firms, is reportedly awaiting signals from the government and shareholders before taking a call.
📊 Financial Snapshot
Net debt: Over ₹2.1 lakh crore
Loss in Q4 FY24: ₹6,400+ crore
ARPU (Average Revenue Per User): Still lower than competitors like Reliance Jio and Airtel
Government equity stake: 33% (converted from interest dues)
Despite a recent ₹18,000 crore FPO (Follow-On Public Offering), analysts believe the company needs additional long-term loans to survive and grow.
🧾 Why This Loan Matters
If approved, the ₹25,000 crore loan would help:
Clear vendor dues (notably Ericsson and Nokia)
Boost 4G and 5G infrastructure
Improve spectrum utilization
Avoid further loss of market share to competitors
The delay in decision-making, however, puts these plans on hold and adds pressure to Vi’s operational sustainability.
❓ Frequently Asked Questions
Q1: Why is Vodafone Idea seeking a ₹25,000 crore loan?
The company needs the funds for network expansion, especially for 4G and 5G services, and to clear pending dues to vendors.
Q2: Which banks are involved in the loan consideration?
Major public sector lenders like SBI, PNB, and Bank of Baroda are part of the proposed lending consortium.
Q3: Why are banks hesitating?
Banks are seeking assurances regarding government backing, equity infusion by promoters, and a sustainable business plan.
Q4: Has Vodafone Idea raised any recent funds?
Yes, the company completed an ₹18,000 crore follow-on public offer (FPO) earlier this year.
Q5: What happens if the loan isn’t approved soon?
Vodafone Idea may face severe delays in 5G rollout, vendor payment defaults, and risk further subscriber loss.
published on 27th june
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