Vi's Rs 25,000 Crore Debt Funding Delay Puts Financial Turnaround At Risk

The delay follows a setback related to the company’s adjusted gross revenue (AGR) dues after the Supreme Court rejected its curative petition to re-calculate the amount

Vi currently owes Rs 70,320 crore in AGR-related dues, a liability it struggles to meet, especially following the Supreme Court’s dismissal of its petition in September

Source : Google Play

Vodafone Idea’s (Vi) ongoing financial challenges have deepened with a significant delay in its Rs 25,000 crore debt-funding plan, raising concerns about the telco’s ability to secure a financial turnaround, according to a report by The Economic Times. The delay follows a setback related to the company’s adjusted gross revenue (AGR) dues after the Supreme Court rejected its curative petition to re-calculate the amount. 

Analysts believe government intervention may be necessary, with expectations that part of Vi's outstanding AGR dues could be converted into equity, offering much-needed relief to the cash-strapped telecom operator. 

Vi currently owes Rs 70,320 crore in AGR-related dues, a liability it struggles to meet, especially following the Supreme Court’s dismissal of its petition in September.

Vodafone Idea is also facing a looming financial burden, with Rs 29,000 crore in government liabilities due by March 2026, followed by an additional Rs 43,000 crore by March 2027, after the moratorium on its dues expires in September 2025.

The company had initially aimed to secure the necessary funding by late November. However, following the Supreme Court’s dismissal of its AGR petition, these debt-raising efforts are now expected to be delayed. This setback comes at a time when Vodafone Idea is grappling with rising liabilities and intense competition, particularly from rivals Reliance Jio and Bharti Airtel.

The government, which holds a 23.15 per cent stake in Vodafone Idea, plays a critical role in the company’s financial recovery. The Aditya Birla Group (14.76 per cent) and Vodafone Group (22.56 per cent) are also key co-owners of Vi.

Debt funding is critical for Vodafone Idea to execute its ambitious capital expenditure (capex) plan, which calls for an investment of Rs 50,000 to Rs 55,000 crore over the next three years. This plan aims to expand Vi’s 4G coverage and accelerate the rollout of 5G services in key markets—an essential step for the company to stay competitive. However, the delay in securing these funds has raised doubts about the feasibility of this strategy.

Vi’s CEO, Akshaya Moondra, has noted that banks are now seeking clarity from the government on potential relief for the company’s hefty AGR dues, as well as the possibility of waiving bank guarantees (BGs) before they can proceed with lending, according to the report.

Vi has also signalled its intention to address any potential cash shortfall through additional debt-to-equity conversions with the government. In parallel, the company has been actively advocating for the removal of the bank guarantee requirement on the spectrum it acquired before 2022. This move would help alleviate the pressure of securing Rs 24,746 crore in bank guarantees over the coming months.