HDFC Bank loans Vodafone Idea Rs 2,000 crore, clearing its outstanding license and SUC debt

2 Nov 2023 , 02:39 PM

In light of improving chances for an equity infusion into the business by the end of December, Vodafone Idea (Vi), a loss-making telco, will probably be able to meet all of its past due licence-fee and 5G spectrum payment commitments thanks to an advance of Rs 2,000 crore from HDFC Bank, India’s most valuable financier and the country’s standard bearer of prudential lending.

The funds were disbursed in mid-September, barely ahead of the deadlines for several bunched-up loans and statutory payment requirements. The loan has a two-year duration according to news reports. Officials from the telecom ministry confirmed to ET that the cash-strapped telecom had paid over Rs 1,700 crore in spectrum usage charges (SUC) and more than Rs 350 crore in previous licence fees (LF) for FY22 and FY23.

An officer told ET, ‘The past LF dues owed by Vi have been cleared.’

The announcement of the credit line from HDFC Bank coincides with reports that Vi’s primary lenders, State Bank of India in particular, are demanding additional promoter equity commitment before issuing new funding. 

ET revealed in September that SBI-led lenders require the company’s promoters to provide a higher level of equity in order for the loan to be approved. An officer declared, ‘The past LF dues owed by Vi have been cleared.’

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