Shares of Vodafone Idea soared after reports said that the Indian telecom giant was in discussions with state-owned lenders Power Finance Corp (PFC) and REC to secure loans for its medium-term funding requirements.

What Happened: Vodafone Idea and its parent company, Aditya Birla Group (ABG), have been in discussions with PFC and REC for the past fortnight, according to a report by The Economic Times. The telecom company aims to bridge a funding gap of ₹25,000 crore to cater to capital expenditure and maintenance costs for the upcoming three years.

However, no formal proposal has been submitted by the company yet, and the state-owned non-banking financial companies (NBFCs) have not actively considered the plan, ET said citing sources.

See Also: Suzlon Shares Jump Nearly 3 5 As Morgan Stanley Remains Overweight After Ntpc Order

While Vodafone Idea’s financial profile poses a risk for the NBFCs, the company’s assets could offer adequate security for any funding. The telecom company is also exploring the possibility of partial funding of its requirements with the State Bank of India.

This comes as Vodafone Idea is grappling with financial challenges. The company has been struggling with a massive debt burden and has been seeking ways to raise funds to stay afloat. The company has a debt of ₹2 lakh crore, encompassing liabilities and dues owed to the government.

In February, the telecom company’s board unveiled a plan to raise ₹45,000 crore via debt and equity. In April, it secured ₹18,000 crore through a follow-on public offering.

Last week, Goldman Sachs projected a potential downside of up to 83% in its share price. If successful, the funding would offer Vodafone Idea the financial cushion it needs to meet its medium-term obligations and possibly reverse its fortunes.

Price Action: Shares of Vodafone Idea jumped 3.48% to ₹13.66 on Tuesday morning.

Read Next: Tata Electronics And Tokyo Electron Join Forces To Strengthen Semiconductor Infrastructure