HDFC Bank Gives Vi Rs. 2000 Crore

One of the leading Indian financial institution HDFC Bank gave Vodafone Idea (Vi) Rs 2000 crore. According to an ET article, the fund will assist the carrier in paying all past-due licence costs and 5G spectrum obligations. Vi was granted a two-year loan by HDFC Bank, and the money was sent to the telecom company in mid-September 2023. The report further stated that Vodafone Idea has paid around Rs 1700 crore for spectrum usage charge (SUC) and Rs 350 crore for past licence fee (LF).

In a letter dated October 31, 2023, Vodafone Idea informed the telecom department that they had already paid 10% of the LF and SUC on October 13, 2023, and that the remaining balance for the quarter ending in September 2023 will be paid by the end of the December 2023 quarter. According to the article, HDFC has informed the telco's principal lenders, including SBI, that the repayment of this loan account won't be impacted in the event that Vi's payments become problematic in the future.

The government has been informed by the financially stressed telecom operator that it is in advanced talks with possible partners to obtain capital and is optimistic that these conversations will be completed before the end of the December 2023 quarter. Thus far, the telco has adhered to its payment schedules. The telecom department will not claim the bank guarantees if it keeps doing this. The government will, however, encash the guarantees if there are any problems with the payments.

Vi has settled the remaining balance (around Rs 1700 crore) from the 5G spectrum auction that it attained last year. According to the report, bankers believe that Vi's bank loan is not the problem. The operator has been making such payments, but the government or the statutory debt is the problem. That's the only place when worries about Vi's finances come up.The telco's Rs 2000 crore fundraising might give the investors with whom Vi is now negotiating more confidence.