With ₹2 lakh crore debt and AGR dues, Vodafone Idea eyes non-bank funds to keep capex going

Debt-laden Vodafone Idea is exploring non-banking avenues to raise funds and sustain its ongoing capital expenditure, outgoing CEO Akshaya Moondra said on August 18. During the June 2025 quarter earnings call, Moondra said lenders remain hesitant until there is clarity on the adjusted gross revenue (AGR) issue.

"Given the fact that we are keen on maintaining a continuity of our capex, which has been going on since last year, we are looking at non-banking sources of funding also. Not the full amount of Rs 25,000 crore that we have talked about, but a lesser amount so that we can continue with the capex cycle," he said on his last day as CEO.

The Vodafone Idea board has approved the elevation of Chief Operating Officer Abhijit Kishore as CEO with effect from August 19, replacing Moondra, whose three-year tenure ends on August 18.

Moondra said the company continues to engage with banks. "I think what the banks are currently looking for is some clarity on the AGR front. So that is where we are engaged with the government. Given that the government has made the conversion, they are today the largest stakeholder in the company. Whether as an equity holder or any dues which are owed to any external party, we are quite confident that there will be a solution to AGR," he said.

VIL, in which the government holds a 49 percent stake, carries a net debt of over Rs 2 lakh crore and an AGR liability of around Rs 75,000 crore at the end of June 2025. The company is banking on Department of Telecom support to resolve the matter before March 2026, when it is scheduled to begin AGR repayments in six equal installments.

Recalling past relief measures, Moondra said: "I think in the past, we have always seen that the government has been supportive. You look at 2019, deferment of spectrum installments, 2021 reforms package, 2023 conversion of government dues to equity, 2025 again conversion of dues to equity. Generally, these actions have happened closer to the time when it is essentially needed."

On operations, VIL said capex of Rs 2,440 crore during the quarter helped arrest customer losses, which fell to 5 lakh from about 50 lakh in the September and December 2024 quarters. The company’s subscriber base stood at 19.77 crore, including 12.74 crore 4G and 5G users.

Vodafone Idea has launched 5G services in 22 cities, including Mumbai, Delhi, Bengaluru, Mysuru, Surat and Ahmedabad, and plans to extend coverage across its 17 priority circles by September.

Despite network improvements, VIL’s consolidated loss widened to Rs 6,608 crore in the June quarter, compared with Rs 6,426.7 crore a year ago, due to higher finance costs and government levies. Finance costs rose 7 percent year-on-year to Rs 5,892.8 crore, while licence and spectrum charges increased 6 per cent to Rs 947 crore.

Revenue from operations grew 5 percent year-on-year to Rs 11,022.5 crore, driven by a 15 percent jump in average revenue per user (ARPU) to Rs 177 from Rs 154 in June 2024.

(With inputs from PTI)