There is a catch, though. SBI is unlikely to disburse the funds till the time Vodafone Idea secures the remaining part of the loan from private-sector banks, the sources said.
“It has reached a good position and, hopefully, [things] should move forward now,” said a senior banker who did not wish to be named. It is the promoter companies that will provide the guarantees, and not the larger, listed group companies, which are not willing to do so, the person added. “While these guarantees may not fully cover SBI’s exposure (which remains unknown), 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, this person said.
Promoters currently hold a combined 25.64 per cent stake in the company, with Vodafone Group Plc owning 19 per cent and the Kumar Mangalam Birla-promoted Aditya Birla group holding 6.63 per cent as of March 2026. The Government of India owns around 49 per cent, but is classified as a public shareholder rather than a promoter.
SBI did not reply to an email from Business Standard on the development. Emails sent to Vodafone Idea and Aditya Birla Group did not elicit a response till press time.
The banker quoted above, meanwhile, said that “private-sector banks are negative on the proposal, and are likely to negotiate separately with the company”. Vodafone Idea, said this person, “has to engage with all the lenders and tie up the entire funding. Some public sector banks are likely to come on board, although it is not yet clear how much each lender will contribute”. Unless all the lenders sanction their respective portion, the proposal cannot move forward, the person added.
The matter relates to the ₹35,000 crore of fresh funding that Vodafone Idea has sought to support its ₹45,000 crore capital expenditure plan over the next three years. This plan includes rolling out 5G network across 17 priority circles; tripling its earnings before interest, taxes, depreciation, and amortisation (Ebitda); and shoring up customer numbers to ensure revenue generation. Of the total funding, ₹25,000 crore has been sought from banks in the form of funded facilities. The remaining ₹10,000 crore is being asked for as a line of credit, or non-funded facilities.
The company has already secured ₹6,400 crore as part of long-term bank facilities in the quarter ended June 2026. “We remain meaningfully engaged with our lenders across these three cohorts and have made substantial progress,” Abhijit Kishore, Vodafone Idea’s chief executive officer (CEO), had said in a post-earnings analyst call on August 11. The three cohorts, he had explained, included six to seven public-sector banks, led by SBI; Indian private sector banks; and external commercial borrowings (ECB) with a set of foreign banks.
“As far as SBI is concerned, the terms are acceptable and it will process and sanction its portion of the loan,” the banker quoted above said. “The other lenders have also been informed and are aware of the proposal, but each will have to go through its own internal process and obtain board approval. The company,” added this person, “will have to negotiate separately with each lender.”
The banker reiterated that while SBI was ready to sanction the loan, the funds would be released only once all the lenders had approved their respective portions. This is because in a capex plan of such nature, part-funding does not work; all the lenders have to come on board.
Kishore had said that Vodafone India was “hopeful of closing the discussion with the PSU banks led by SBI”, while continuing work on other debt funding avenues.
Bank funding will be critical for the company, which intends to intensify capex investments in FY27. After raising the first tranche of funds, Vodafone India had placed orders worth ₹9,000 crore with network providers Ericsson, Nokia, Samsung and others for equipment for its 5G rollout.
Promoter backing has also been reflected in the equity flowing into the company as also in the sentiments expressed by Aditya Birla Group Chairman Kumar Mangalam Birla and the Vodafone management. “Confidence among investors and lenders also strengthened during the year,” Birla said in the company’s FY26 annual report. “The company raised ₹3,300 crore through non-convertible debentures ahead of the adjusted gross revenue resolution. Promoter support remained unequivocal,” he added.
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₹45,000 crore capex plan for three years
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₹6,400 crore raised in Q1FY27 in first tranche of funding
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Vi discussing loan “terms with three cohorts — SBI-led public sector banks, private-sector banks, and foreign banks for external commercial borrowing”
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Funding needed for capex for remaining competitive in the Indian telecom sector
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Promoter guarantee still ‘make or break’ caveat
