Tata Capital has emerged as one of the largest individual investors in Vodafone Idea’s recent bond issuance, committing around ₹500 crore to the telecom company’s ₹3,300-crore fundraising exercise. The investment comes amid heightened activity from non-banking financial companies (NBFCs) and mutual funds seeking higher yields, particularly as traditional banks remain constrained by exposure limits and asset quality concerns.
Vodafone Idea’s bond sale, conducted through its wholly owned unit Vodafone Idea Telecom Infrastructure Ltd (VITIL), was structured in two secured tranches, with Series A comprising ₹3,000 crore carrying a 12% coupon and Series B of ₹300 crore at a 7% coupon. Both tranches have a tenor of about 21 months, with a call option available after one year. Proceeds are expected to support the company’s capital expenditure and business growth plans, including repayment of business consideration arising from the transfer of fibre assets to the infrastructure arm.
In addition to Tata Capital’s commitment, other NBFCs such as JM Financial Credit Solutions, Aditya Birla Capital and Hero Fincorp also participated in commitments totalling approximately ₹1,300 crore. The involvement of mutual funds and foreign investors alongside NBFCs underscores a growing risk appetite among non-bank lenders in backing strategically important but financially stressed companies.
Vodafone Idea has intensified its efforts to secure funding as part of its broader strategy to stabilise its financial position and support network expansion. The company had earlier raised ₹3,300 crore through this NCD issuance, which was met with strong demand from investors attracted by the yield premium on offer. Market reaction has been positive, with the telecom’s shares recently rising after the fundraise announcement, reflecting renewed investor confidence in its ability to shore up capital and continue operations.
This bond issue and the participation of marquee NBFC investors like Tata Capital are seen as important milestones in Vodafone Idea’s ongoing quest for sustainable funding sources, especially as the telecom sector grapples with competition, debt obligations, and the need for continued investment in 4G/5G infrastructure.
