Vodafone Idea Plans $1.8 Billion Loans for Turnaround Efforts

Vodafone Idea seeks Rs 15,000 crore ($1.8 billion) in loans over two years to revitalize operations.

  • Vodafone Idea seeks Rs 15,000 crore ($1.8 billion) in loans over two years to revitalize operations.
  • Funds will be used for debt repayment, 5G network rollout, and spectrum bidding.
  • The move follows a successful $2.2-billion share sale last month to improve financial health.

Vodafone Idea is on a quest to secure loans amounting to Rs 15,000 crore ($1.8 billion) in the coming two years as part of its strategy to rejuvenate its business, as per sources cited by Bloomberg. This initiative marks the beginning of a broader plan to accumulate Rs 25,000 crore in debt. The telecommunications giant, led by billionaire Kumar Mangalam Birla, aims to utilize the funds for various purposes, including repaying operational creditors, expanding its 5G network infrastructure, and participating in additional spectrum auctions.

Fresh from a $2.2-billion share sale success in the past month, the joint venture between Vodafone Group Plc and Birla’s conglomerate is reportedly engaging with both government-owned and private banks for this substantial loan. Notable lenders approached include State Bank of India, Bank of Baroda, and Punjab National Bank. Discussions are ongoing, with the State Bank of India likely to lead a consortium of both state-owned and private banks for the loan, which will be disbursed in installments.

The company recently concluded its Rs 18,000-crore follow-on public offer (FPO), experiencing significant demand from global institutional investors. Vodafone Idea is hopeful about a resurgence, with brokerage firm Nuvama predicting its inclusion in the MSCI Global Standard index during the August review, which could potentially attract substantial investments into the company’s shares. India’s increasing weight in the MSCI Emerging Market Index is seen as a positive indicator for Vodafone Idea’s future prospects.