Vodafone Idea Looks to Non-Banking Sources for Funding
Debt-ridden Vodafone Idea is exploring non-banking sources to raise funds and maintain the continuity of its capex plan, according to the company’s CEO Akshaya Moondra.
During the company’s earnings call for the June 2025 quarter, Moondra stated that banks are seeking clarity on the adjusted gross revenue (AGR) matter before issuing debt to the telco. As a result, Vodafone Idea is looking at non-banking sources of funding to sustain its capex cycle.
AGR Issue and Banking Funding
The AGR issue has been a long-standing concern for Vodafone Idea, with the company reporting an outstanding net debt of over Rs 2 lakh crore. The firm’s AGR liability at the end of the June 2025 quarter stood at around Rs 75,000 crore.
Moondra expressed confidence that the government, which holds a 49% stake in the company, would provide support in resolving the AGR issue. He cited past instances where the government had extended support to the company, such as the deferment of spectrum installments in 2019 and the conversion of government dues to equity in 2023 and 2025.
Capex Plans and Network Improvement
Vodafone Idea has been investing heavily in its network, with a capex of Rs 2,440 crore during the reported quarter. This investment has enabled the company to arrest the decline of customers by 90% to 5 lakh compared to the decline of around 50 lakh in the previous quarters.
The company’s total subscriber base stood at 19.77 crore at the end of the June 2025 quarter, with a mix of 12.74 crore 4G and 5G subscribers. Vodafone Idea has rolled out 5G services in 22 cities and plans to extend it to all cities across its priority 17 circles by September.
Financial Performance
Despite the improvement in its network, Vodafone Idea reported a widening of its consolidated loss to Rs 6,608 crore in the first quarter ended June 2025. The loss was mainly due to an increase in finance cost and government levies.
The company’s finance cost increased by about 7% to Rs 5,892.8 crore, while the licence fees and spectrum usage charges payable to the government increased by about 6% to around Rs 947 crore. Revenue from operations increased by about 5% to Rs 11,022.5 crore, driven by a 15% increase in average revenue per user to Rs 177.
Outlook and Future Plans
Vodafone Idea is looking to resolve the AGR issue with the government before the deadline of March 2026, when the company needs to pay the AGR liability in six equal installments. The company is confident that the government will provide support in resolving the issue, given its history of extending support to the company.
In the meantime, Vodafone Idea will continue to explore non-banking funding sources to sustain its capex plans and improve its network. The company’s focus on 5G services and network improvement is expected to drive growth and increase its competitiveness in the Indian telecom market.
For Indian investors and traders, the development is significant as it highlights the challenges faced by the telecom sector and the importance of government support in resolving the AGR issue. As the company navigates these challenges, investors will be closely watching its progress and the impact on the Indian stock market.
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