News

Telecom major Vodafone Idea on Thursday, December 18, announced that it has successfully raised ₹3,300 crore through the issuance of unlisted, unrated, secured Non-Convertible Debentures (NCDs).

The fundraise was executed through Vodafone Idea Telecom Infrastructure Limited (VITIL), a subsidiary of the company.

The company said the fundraise attracted strong interest, exceeding the NCD issuance, from a diversified group of marquee investors, including large Non-Banking Financial Companies (NBFCs), Foreign Portfolio Investors (FPIs), and Alternative Investment Funds (AIFs).

The proceeds from this issuance will be utilized by VITIL to repay its payment obligations to Vi. This will enable Vi to bolster its capex and support business growth.

Abhijit Kishore, CEO, VIL said, “This fresh fundraise reinforces investor confidence in our strategy and long-term vision. This capital strengthens our momentum as we continue to scale our network and enhance services for our customers. Discussions relating to long-term debt raise to support capex are ongoing with banks.”

JM Financial Products Ltd. acted as the exclusive Debt Arranger in relation to this fundraise.

Even as the government is currently reassessing Vodafone Idea’s adjusted gross revenue (AGR) dues after the Supreme Court order, the company’s overall survival hinges on the relief it gets, fundraise and bank debt.

AGR represents the income calculated from telecom operators’ total revenues, serving as the basis for regulatory fee payments.

Vodafone Idea remains engaged with lenders to secure debt financing to support its broader capex plans of ₹50,000-55,000 crore. In August, the company announced that it had begun exploring non-banking sources of funding to maintain the continuity of its critical capital expenditure cycle.

In the current financial year, the company is looking to spend in the range of ₹7,500-8,000 crore in capex, Kishore had said in a recent earnings call. In the first half of the current financial year, the company already incurred capex of ₹4,200 crore to improve coverage of 4G networks and the rollout of 5G ones.

“We are not really looking for external funding for this particular capex. It is part of the internal accrual as well as the money that we have," Kishore had said, adding that the focus of the current capex spending is primarily towards coverage split between 4G and 5G.

Of the ₹2 trillion dues, the AGR dues of Vodafone Idea alone stands at ₹78,500 crore as on September end. The remaining is mostly the amount that the company owes the government for wireless spectrum purchased in auctions.

The telco posted a net loss of ₹5,524 crore, lower than the year-ago loss of ₹7,176 crore in the September quarter. The company’s revenue from operations increased 2.4% on-year and 1.6% sequentially to ₹11,194.7 crore.

With 196.7 million customers, Vodafone Idea is significantly behind the subscriber base at Reliance Jio and Bharti Airtel. Jio has 506 million customers and Airtel 364 million.

The company’s average revenue per user (ARPU), a key performance metric among telcos, rose marginally to ₹167 in the latest quarter from ₹165 in the April-June quarter. In comparison, Reliance Jio’s ARPU stood at ₹211.4 and Airtel’s ₹256 in the September quarter.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

Download the Mint app and read premium stories

Log in to our website to save your bookmarks. It'll just take a moment.

Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.