Vodafone Idea Limited (Vi) has reportedly sought a no-objection certificate (NOC) from lenders led by State Bank of India (SBI) to pledge its fibre optic network in a bid to raise nearly Rs 70 billion from private credit or non-banking sources for capital expenditure.
An NOC from banks is required to raise debt against dedicated security. While the move would enable Vi to secure fresh funding, new lenders would not get priority over existing bank debt. Meanwhile, Vi has tried multiple times over the past six years to monetise its fibre assets through private equity players and US-based infrastructure funds. In 2023, its pan-India fibre network was valued at Rs 100-115 billion, while in-building solutions were pegged at Rs 5 billion.
Banks remain cautious about further exposure to Vi, given that most of its liabilities are government dues. The operator’s debt stands at around Rs 2 trillion, largely comprising deferred spectrum payments and adjusted gross revenue (AGR) liabilities. Fresh debt is critical for Vi to sustain network investments, as the Rs 200 billion equity raise completed in April 2024 is expected to be nearly exhausted by the end of this month.
