Vodafone Idea board to consider fundraising options on May 30 after setback in court

Debt-laden telecom operator Vodafone Idea has called a board meeting on May 30 to consider various fundraising options, even as the company flagged serious concerns over its ability to remain operational beyond FY26 without timely government intervention.

In a regulatory filing to the BSE on Tuesday, the loss-making firm said the board will meet to “consider and evaluate any and all proposals for raising of funds in one or more tranches,” through rights issue, public offer, private placement, preferential allotment, or qualified institutional placement, among other routes.

The board will also consider fundraising via debt instruments, including bonds. It will decide on holding extraordinary general meeting to get shareholders' nod for the fundraise on the same day.

The meeting will also see the approval of the company's financial results for the quarter and full year ended March 31, 2025.

“We are really shocked by these petitions... It is not expected of a multinational company,” a bench of Justices J B Pardiwala and R Mahadevan told senior advocate Mukul Rohatgi, who appeared for the company.

Vodafone Idea had sought a waiver of nearly ₹30,000 crore comprising interest, penalty, and interest on penalty related to its AGR dues. The company argued it was not seeking a review of the apex court's earlier verdict, but a waiver of financial rigours stemming from the 2019 AGR ruling.

In its petition, the company highlighted that the government holds a 48.99% stake following the conversion of interest dues into equity. Despite this, the Centre continues to press for additional dues of approximately ₹1.19 lakh crore, including spectrum-related liabilities.

The company proposed that the government accept ₹17,213 crore as final principal dues, waiving 100% of interest and penalties. It suggested the remaining AGR dues of ₹7,852 crore be paid over 20 years, with no interest accrual and a moratorium until FY30, followed by 11 equal annual instalments.

Vodafone Idea CEO Akshaya Moondra, in a letter to the Department of Telecommunications (DoT), warned that without government relief on AGR dues, the company may be forced into insolvency by FY26 as discussions with banks for fresh funding would stall.

“Without GoI’s timely support on AGR, VIL will not be able to operate beyond FY26,” the letter stated, adding that the lack of bank funding and moratorium on spectrum payments would freeze capex, shrink the subscriber base, erode EBITDA, and render the government’s equity stake worthless.

The letter further warned that failure to sustain Vodafone Idea could turn the sector into a duopoly, harming competition and future spectrum auctions, a key revenue stream for the government.