Vodafone Idea sees light at the end of a dark tunnel. The firm finds a way to pay NCD instalments. Around Rs 5000 crores were raised from various banks.

Around Rs 5000 crore short-term loans have been successfully obtained by Vodafone Idea. The company was facing the brink of a huge loss in business as well as a reputation for the past few months. Finally, the Indian telecom giant is emerging out of the dark. It has managed to secure almost Rs 5000 crores which will be sufficient to settle the NCD instalments pending. The group will be utilising Rs 3000 crores towards the redemption of NCDs by next month. Already it has redeemed around Rs 1500 crores earlier this month.

The company is confident of settling this short-term loan with interest around 6.5% to 8.5% in a year’s time. The hike in charges of Vodafone prepaid plans is likely to generate a source of income that will be used for repayment of the loans.

The current loan has been obtained from a number of banks: –

• HDFC Bank,
• IDFC Bank,
• State Bank of India (SBI),
• Union Bank of India,
• IndusInd

The company is also carrying out discussions with global investors and is hopeful of raising equity funds on a long-term basis. This should be able to solve the financial crisis going on currently. The Vodafone Board is also deciding to accept the conversion of the due interest on spectrum-related instalments into Government equity.

After the conversion, the Indian Government will have the largest share, 35.8% among all the current promoters. Vodafone Group will own 28.5% and the Aditya-Birla Group will be responsible for 17.8%. We will have to wait and see if this was good choice of a decision in the long run. For now, Vodafone Group owns 44.39% and Aditya-Birla Group owns 27.66%.