Vodafone Idea Faces Lender Demands for Guarantee

Vodafone Idea's ambitious ₹35,000 crore debt plan is currently facing significant hurdles as lenders are demanding revised financial projections and a corporate guarantee from another Aditya Birla Group entity. These demands highlight the banks' insistence on enhanced safeguards for one of the sector's largest loans.

Sources indicate that the company's initial business projections were deemed too optimistic and have since been adjusted. While discussions are ongoing, no final decision has been made regarding the loan proposal. This funding is critical for Vodafone Idea's planned ₹45,000 crore capital expenditure aimed at upgrading its network infrastructure.

SBI Capital Markets is reportedly working on the proposal, which includes non-funded debt. Despite stabilizing its subscriber base in the March quarter and seeing a slight improvement in average revenue per user (Arpu), Vodafone Idea faces stiff competition and substantial spectrum dues. The company has outlined a three-year cash strategy to secure over ₹1.08 trillion, including bank debt and potential refunds.

Analysts remain divided, with some seeing improved prospects due to potential promoter infusion and rating upgrades, while others point to persistent challenges like competition and significant spectrum debt. The timely fundraise is essential for Vodafone Idea's network expansion and to meet its upcoming payment obligations.