India’s Vodafone Idea unit cuts debt issue size, aims for December completion, sources say

MUMBAI: India’s Vodafone Idea Telecom Infrastructure, a wholly-owned subsidiary of telecom operator Vodafone Idea, has slashed the size of its planned bond sale, two sources aware of the matter said on Thursday, citing expectations of securing cheaper funding from lenders.

The unit of India’s third-largest wireless carrier will now raise around 32 billion rupees ($359 million) through bond sales, down from 50 billion rupees, the sources added.

The company will raise a chunk of the debt via two-year bonds at a yield of around 12%, and the remaining through three-year and two-month bonds at a yield of about 14%. It will aim to complete the placement before the end of December.

Both the issues will have a call option at the end of one year and are guaranteed by Vodafone Idea.

The company is expected to tap private credit funds for the issues, and the money will be used for expansion purposes, one of the sources said.

Both sources requested anonymity as they are not authorised to speak to media. Vodafone Idea did not comment on the matter.

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Earlier this month, India’s apex court said the government can consider Vodafone Idea’s relief request for all of its adjusted gross revenue telecom (AGR) dues and the relief could include penalty and interest.

The company is quite confident that it can raise funding from banks in 2026 after the order, and these funds will be cheaper compared to the debt issues, the sources added.

In May, Vodafone Idea, led by billionaire Kumar Mangalam Birla, received board approval to raise 200 billion rupees through equity or loans.

The company has struggled to pay outstanding spectrum and revenue-sharing dues since a landmark 2019 Supreme Court ruling widened the definition of revenue used to calculate payments.

To support the loss-making carrier, the government in April converted part of its spectrum dues into equity, raising its stake in the company to 48.99%.