SBI Ready To Sanction Its Share Of Vi Loan
Vodafone Idea (Vi) has moved closer to securing a major portion of the funding it needs for its network expansion, with State Bank of India agreeing to sanction its share of a proposed loan package.
However, the money will not be released immediately.
SBI’s disbursement remains dependent on Vi securing funding commitments from other lenders, particularly private-sector banks that are seeking stronger guarantees from the company’s promoter group.
Vi Needs ₹35,000 Crore In Fresh Funding
Vi is seeking around ₹35,000 crore in fresh funding to support a much larger ₹45,000 crore capital expenditure plan over the next three years.
The plan is aimed at strengthening Vi’s network, expanding its 4G footprint and rolling out 5G services across 17 priority circles.
The company also wants to improve its subscriber base and earnings capacity as it attempts to compete more effectively with Reliance Jio and Bharti Airtel.
SBI’s Approval Removes A Major Roadblock
SBI had previously been cautious about proceeding without adequate protection for its exposure.
The situation changed after Vi agreed to provide guarantees through promoter-group companies.
This helped resolve a major sticking point in negotiations and allowed SBI to move towards sanctioning its portion of the proposed financing.
However, the guarantees are not being provided by the larger listed companies of the promoter groups.
Instead, smaller promoter entities are expected to provide the guarantees.
Private Banks Are Still Not Convinced
While SBI has moved forward, private-sector banks remain more cautious.
Lenders are reportedly seeking stronger guarantees and additional comfort before committing their own portions of the financing.
The concern is straightforward: Vi remains a financially stressed telecom company with significant long-term obligations.
Private banks therefore want greater protection against the possibility that the company struggles to generate sufficient cash flow to repay fresh debt.
Why Promoter Guarantees Matter
A promoter guarantee gives lenders an additional layer of protection.
If the borrowing company faces difficulties meeting its obligations, the guarantee can provide lenders with another avenue for recovering their money, depending on the terms of the guarantee.
For Vi, obtaining these guarantees is particularly important because lenders need confidence that the company’s promoters remain financially committed to its turnaround.
The willingness of promoter entities to provide guarantees has therefore become a key part of the funding negotiations.
SBI Will Not Release Money Yet
Even though SBI has agreed to sanction its share, Vi cannot immediately access the entire amount.
The bank is reportedly waiting for the other lenders to approve their respective portions.
This is because Vi’s network expansion requires coordinated funding rather than a small amount of financing from a single lender.
If the remaining banks do not participate, the complete financing structure cannot move forward as planned.
Vi Is Talking To Three Groups Of Lenders
The company has been engaging with three broad categories of lenders.
The first is a consortium of public-sector banks led by SBI.
The second consists of Indian private-sector banks.
The third includes foreign banks that could provide funding through external commercial borrowings.
Vi therefore needs to satisfy different groups of lenders, each with their own internal risk assessments, approval processes and conditions.
₹25,000 Crore To Come As Funded Facilities
Of the proposed ₹35,000 crore fresh funding, around ₹25,000 crore is being sought through funded bank facilities.
Another ₹10,000 crore is being sought through non-funded facilitiessuch as lines of credit and related arrangements.
These facilities are particularly important for Vi’s procurement of network equipment and its broader infrastructure expansion.
The company needs sufficient financial support to execute its planned capital expenditure without putting additional pressure on its already stretched cash position.
Vi Has Already Secured ₹6,400 Crore
The telecom operator has already made some progress.
Vi secured around ₹6,400 crore in long-term bank facilities during the quarter ended June 2026.
The company has also placed equipment orders worth around ₹9,000 crore with major network suppliers.
These developments indicate that Vi is preparing to accelerate network investment even as the larger funding package remains under negotiation.
The ₹45,000 Crore Capex Plan Is Critical
The proposed capital expenditure programme is central to Vi’s attempt to remain competitive in India’s telecom market.
The company needs to expand its network capacity, improve coverage and accelerate its 5G rollout.
Without substantial investment, Vi risks falling further behind Jio and Airtel, both of which have already made significant investments in next-generation networks.
The funding therefore has implications not only for Vi’s balance sheet but also for its ability to remain a viable third major private telecom operator.
Promoters Hold A Minority Stake
Vi’s promoter groups together hold around 25.64% of the companyaccording to the latest figures cited in the report.
Vodafone Group owns around 19%, while the Aditya Birla Group holds approximately 6.63%.
The Government of India owns close to 49% of Vi, although its stake is classified as a public shareholding rather than promoter ownership.
This structure makes lender concerns around promoter support particularly important.
Vi Has Received Government Support
Vi’s latest funding push follows significant government relief on its adjusted gross revenue obligations.
The government has reduced the company’s AGR liability and provided additional time for repayment.
This has improved lender sentiment towards Vi and helped revive discussions around fresh bank financing.
However, banks continue to evaluate whether the company’s underlying business can generate sufficient cash flow over the long term.
Tariff Hikes Could Be Important
Another major factor for lenders is the possibility of higher mobile tariffs.
Vi’s financial position would improve considerably if telecom operators were able to raise tariffs without triggering significant customer losses.
Higher average revenue per user would give Vi greater capacity to service debt and fund network investment.
The company therefore needs both fresh financing and stronger operating performance to make its turnaround sustainable.
Vi’s Financial Performance Is Showing Some Improvement
Vi has reported signs of improvement in its recent financial performance.
Its consolidated revenue from operations reached around ₹11,689 crore in the June 2026 quarterwhile its net loss narrowed substantially compared with the previous year.
Average revenue per user also increased to around ₹195up from ₹177 a year earlier.
These improvements provide some encouragement to lenders, although the company continues to face significant financial challenges.
Private Banks Could Decide The Next Step
The biggest question now is whether private-sector banks agree to participate on terms acceptable to Vi.
If they do, SBI’s sanction could become an important step towards unlocking the broader funding package.
If private lenders remain reluctant, Vi may have to negotiate additional guarantees, alter the financing structure or seek alternative sources of capital.
The outcome will determine how quickly the company can execute its planned network investments.
Why This Matters For Vi Customers
The funding is not simply about reducing Vi’s financial pressure.
It could directly affect customers.
More capital would allow Vi to expand 4G coverage, increase network capacity and accelerate its 5G rollout.
Better network quality could help the company reduce customer churn and attract users who have shifted to competitors because of coverage or performance concerns.
The Funding Could Help Preserve Competition
India’s telecom market is dominated by a small number of major operators.
Keeping Vi financially viable is therefore important for maintaining competition.
If Vi can successfully raise the required capital and improve its network, it could remain a strong third private operator alongside Jio and Airtel.
Failure to secure funding, however, could make its competitive position increasingly difficult.
The Final Loan Is Still Not Done
SBI’s willingness to sanction its portion is a significant development, but it does not mean Vi has secured the entire ₹35,000 crore package.
The company still needs commitments from other lenders, particularly private-sector banks that are demanding stronger promoter guarantees.
The next phase of negotiations will therefore be critical.
Vi Gets Closer, But The Hard Part Remains
Vodafone Idea has crossed an important hurdle after SBI agreed to sanction its share of the proposed financing.
But the telecom operator is not yet in the clear.
Private-sector lenders remain cautious and want stronger guarantees before committing funds. Vi must also secure participation from the other lenders before SBI releases its money.
For Vi, the stakes are enormous. The success of this funding plan could determine how quickly it expands its 4G and 5G networks and whether it can mount a stronger challenge to India’s two telecom giants.
Summary
Vodafone Idea has moved closer to securing its planned ₹35,000 crore fresh funding after SBI agreed to sanction its portion of the proposed loan. However, disbursement depends on Vi securing commitments from other lenders. Private banks are seeking stronger promoter guarantees before joining the financing package. The funds would support Vi’s ₹45,000 crore three-year network expansion plan, including 5G rollout across 17 priority circles.