A clutch of lenders led by State Bank of India are yet to firm up plans to finance telecom player Vodafone Idea Ltd. with a Rs 25,000 crore loan, two people in the know said on conditions of anonymity.
As of now, there has been no clear proposal from the company, although conversations have been ongoing, the people said. While lenders led by SBI are open to funding the company, a final approval will depend on firm government support on the payment of adjusted gross revenue dues.
Queries mailed to Vodafone Idea and State Bank of India were not immediately responded to. This story will be updated once the responses are received.
Vodafone Idea owes Rs 83,400 crore in AGR dues to the government and had sought a waiver on over Rs 45,000 crore comprising interest, penalty, and interest on penalty.
NDTV Profit had previously reported that the government was weighing various options to provide support to the beleaguered telecom company. The plan may include a moratorium on payments, and asking banks to provide fresh credit.
This is because the government is not in favour of a telecom duopoly in the country. Union Telecom Minister Jyotiraditya Scindia, at a speech this week, reiterated the government’s stance that India cannot afford the duopoly.
The lenders have not yet been informed about the government’s specific plan to support Vodafone Idea, the people quoted above said.
Currently, the government owns about 49% stake in Vodafone Idea, which was acquired as part of a relief package where the government converted interest dues into equity.
Despite the current financial challenges, Vodafone Idea has submitted projections suggesting performance visibility and operational improvement in the next three to four years, adding a layer of optimism to the ongoing discussions.
Vodafone Idea reported a net loss of Rs 7,166 crore in the quarter ended March 31, an improvement of 6.6% year-on-year. Sequentially, the loss widened from Rs 6,609 crore as of Dec. 31, 2024. It has seen its customer base fall consecutively, as competition from peers Jio and Airtel continues to hurt.
At around 198 million, the customer base is the lowest since the merger between Vodafone India and Aditya Birla Group’s Idea Cellular in 2019.
The company’s average revenue per user, or ARPU — a key metric to assess a telco’s health — is flat at Rs 175 as compared to Rs 173 in the preceding quarter. Capex spending was Rs 4,230 crore, the highest in a quarter since the merger, taking the capex for FY25 to Rs 9,570 crore.
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