How Vodafone Idea Plans A Comeback With Rs 20,000 Cr Fundraise, 5G Rollout & Govt Backing

Vodafone Idea (VIL), the debt-ridden telecom company, has announced a series of steps to revive its operations and improve its financial health. 

The company reported a reduced loss of Rs 7,166.1 crore for the quarter ending March 2025, down from Rs 7,674.6 crore in the same period last year.

Here's a simple breakdown of what VIL is planning:

Rs 20,000 Crore Fundraising Plan

Vodafone Idea plans to raise up to Rs 20,000 crore to support its revival efforts. This money may be collected through a public offer, private placement, Qualified Institutional Placement (QIP), or by issuing global financial instruments like GDRs, ADRs, bonds, or debentures. 

The fundraising will happen in one or more phases and needs approval from shareholders and regulators. The raised capital will help the company invest in network upgrades, expand services (including 5G), and manage its existing debts.

Support from Government and Lenders

VIL is still seeking relief from the government, especially with its huge AGR dues. Although the Supreme Court rejected its latest appeal, the company believes it can still work with the Department of Telecommunications (DoT) to find a solution based on its future cash flows. 

Vodafone Idea is also in talks with banks to get more debt funding, which is essential to support its long-term investment plans.

Government Shareholding Rises

After converting some spectrum-related dues into equity, the Indian government now owns 49% of Vodafone Idea. This is a big jump from its earlier 22.6% stake. Even though promoter holding has dropped to 25.6%, they continue to manage and control the daily operations of the company. 

This government support is important for investor confidence and the company’s survival.

5G Rollout Underway

Vodafone Idea has already launched its 5G services in Mumbai, Delhi, Chandigarh, and Patna. The company plans to expand 5G coverage to all 17 telecom circles where it owns 5G spectrum by August 2025. 

This is part of its effort to catch up with competitors and tap into the growing demand for high-speed mobile internet.

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Improved Performance Metrics

In the quarter ending March 2025, Vodafone Idea showed slight improvement. Revenue grew by 3.8% year-on-year to Rs 11,013.5 crore. Average Revenue Per User (ARPU), a key figure for telecom companies, rose from Rs 153 to Rs 175 due to higher tariffs and better-quality users. 

Losses for the quarter also narrowed slightly. The company also reported its best average daily revenue in the past five years and reduced subscriber losses.

AGR Dues and Recovery from Vodafone Group

Vodafone Idea still owes nearly Rs 1.95 lakh crore in total dues, including payments for spectrum and AGR. These dues are spread over many years, up to 2044. On the other hand, the company expects to recover Rs 6,393.9 crore from the promoters of the old Vodafone India under a previous agreement. 

The deadline to claim this amount has been extended to September 30, 2025, giving VIL more time.