Vodafone Idea Moves Closer to SBI Loan as Guarantee Issue Nears Resolution

Vodafone Idea Nears SBI Loan, But Private Lenders Hold the Key

Vodafone Idea has moved a step closer to securing a major loan from the State Bank of India (SBI) to fund its network expansion, but the funds will not be released until the telecom operator ties up the remaining financing from private-sector banks, according to reports.

SBI has reportedly agreed to sanction its portion of a proposed loan package after Vodafone Idea offered guarantees from promoter-group entities, resolving an earlier hurdle. However, the guarantee has come from a smaller promoter company and is being viewed primarily as a sign of promoter support rather than a strong credit guarantee, the Free Press Journal reported.

Private-sector banks are seeking more substantial backing from larger promoter-group companies along with letters of comfort, and Aditya Birla Group chairman Kumar Mangalam Birla is reportedly reluctant to provide such guarantees through major group entities, making negotiations more complex, the report added.

The Funding Plan

Vodafone Idea is seeking around ₹45,000 crore over three years to support capital expenditure and strengthen its network infrastructure. Of this, ₹35,000 crore is fresh funding, comprising ₹25,000 crore in funded facilities and ₹10,000 crore as a line of credit, Business Standard reported.

The capital expenditure plan includes rolling out 5G across 17 priority circles, tripling Ebitda, and bolstering customer numbers.

A senior banker, speaking on condition of anonymity, said SBI is unlikely to disburse funds until Vodafone Idea secures the remaining part of the loan from private-sector banks. "It has reached a good position and, hopefully, [things] should move forward now," the banker told Business Standard, adding that the promoter companies will provide the guarantees, not the larger listed group companies. "While these guarantees may not fully cover SBI's exposure, they provide an additional layer of comfort," the banker said.

Vodafone Idea's only ask was that if everything goes well for four years, the guarantees should be released, which SBI is willing to accept, according to the banker. The same source said private-sector banks are "negative on the proposal" and are likely to negotiate separately with the company. "Vodafone Idea has to engage with all the lenders and tie up the entire funding," the banker said, adding that unless all lenders sanction their respective portions, the proposal cannot move forward.

Guarantees and Government Stake

Promoters currently hold a combined 64% stake in the company, with Vodafone Group Plc owning 19% and the Kumar Mangalam Birla-promoted Aditya Birla Group holding 63% as of March 2026, Business Standard reported. The Government of India owns around 49% but is classified as a public shareholder rather than a promoter, the report said.

The funding plan takes on greater importance because the Indian government owns nearly 49% of Vodafone Idea after converting the company's statutory dues into equity, the Free Press Journal said.

Progress and Market Reaction

Vodafone Idea has already raised around ₹6,400 crore through its initial funding tranche, which includes promoter warrants as well as debt and non-funded facilities from Indian private banks and foreign lenders, according to the Free Press Journal. The company has also placed orders worth approximately ₹9,000 crore as it prepares to step up network investments, the report added.

CEO Abhijit Kishore said the company is "hopeful of closing the discussion with the PSU banks led by SBI," Business Standard reported.

Shares of Vodafone Idea rose on Monday after reports indicated the operator is close to securing funding from SBI, with the stock trading at 15 on the NSE, up 51% or 21 during the session, Lokmat Times reported.

Analyst Optimism

Brokerage firm Citi retained its 'Buy' rating on Vodafone Idea and set a price target of ₹17 per share, Lokmat Times reported. Following a meeting with the company's management, Citi said improving subscriber trends and average revenue per user (ARPU) suggest that Vodafone Idea's network investments are beginning to translate into better customer acquisition, retention and monetisation.

The brokerage said its discussions with management focused largely on funding visibility, the pace of network rollouts, the sustainability of subscriber recovery and the potential for further organic growth in ARPU, the report said.

Financial Performance

Vodafone Idea reported a consolidated net loss of ₹3,754 crore for the quarter ended June 30, 2026, Lokmat Times reported. The sequential comparison was distorted by exceptional items, the report said. EBITDA rose 3% to ₹5,034 crore, while year-on-year revenue increased 6% and EBITDA grew 1%, it added.

Background: From Merger to 5G Rollout

Vodafone Idea traces its origins to the merger of Vodafone India and Idea Cellular, announced on March 20, 2017 and completed on August 31, 2018, creating Vodafone Idea Limited, according to TelecomTalk. The combined operator began with nearly 408 million customers and a revenue market share of approximately 2% in Q1 FY19, with Vodafone Group initially holding 2% and the Aditya Birla Group 26%.

The unified Vi brand was introduced on September 7, 2020. In April 2024, Vodafone Idea completed a follow-on public offer of approximately ₹18,000 crore, and in September 2024 concluded network equipment agreements worth approximately ₹30,000 crore with Nokia, Ericsson and Samsung, TelecomTalk reported.

Vi commercially launched 5G services in Mumbai in March 2025, and by March 2026 had expanded 5G to 83 cities across all 17 priority circles, the report said. Customer ARPU increased to ₹190 in Q4 FY26, while monthly subscriber additions turned positive from February 2026, it added.