Vi Taps SBI for Rs 23,000 Cr Loan and Seeks Rs 10,000 Cr Guarantees to Boost 4G and 5G

Vodafone Idea (Vi) plans to borrow Rs 23,000 crore in term loans and secure an additional Rs 10,000 crore in bank guarantees. This funding is crucial for Vi, India’s third-largest telecom company, to enhance its 4G and roll out new 5G networks. This move aims to keep up with larger competitors, Reliance Jio and Airtel.

Meeting Lenders’ Demands
Vi, a joint venture between Vodafone Plc and Aditya Birla Group, recently addressed lenders’ demands by committing more equity. The proposal for the loans was presented to a State Bank of India (SBI)-led group of banks. This funding is part of a larger Rs 55,000 crore capex (capital expenditure) plan to expand 4G coverage and launch 5G services in key markets.

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Assessment Process
Banks will require a techno-economic viability (TEV) report from a top consultancy to evaluate Vi’s creditworthiness before deciding on the loan. The TEV report assesses technological, market, financial, and regulatory risks to help banks understand the potential risks of lending to Vi. A person involved in the discussions mentioned that Vi’s presentation outlined future plans for infrastructure upgrades, which banks are now reviewing through the TEV process.

Equity Commitment and Future Plans
Vi’s request for debt comes after securing around Rs 24,000 crore in equity capital, meeting a key condition from lenders. Vi has been in discussions with banks to raise up to Rs 25,000 crore in debt and additional non-fund based facilities (like bank guarantees) of Rs 10,000 crore. This planned Rs 55,000 crore capex over the next three years is essential for Vi’s ability to compete with Reliance Jio and Bharti Airtel, who have already rolled out nationwide 5G networks.