According to a report, Bharti Airtel plans to borrow up to Rs 3,000 crore from the local money market to pay for the 5G airwaves the government bought in the recently concluded auction.

The telecom operator is selling commercial paper (CP) with maturities of up to 12 months, according to people familiar with the matter, The Economic Times reported.

SBI Mutual Fund is believed to have agreed to buy Airtel’s debt of over Rs 1,000 crore and may buy CP due in February next year at 6.53%, the report said.

Sunil Mittal’s Airtel bought spectrum worth Rs 43,084 crore in India’s first 5G auction that ended earlier this month. According to a notice posted on the DoT website, if Airtel chooses to pay for the 5G spectrum in 20 equal annual instalments, its down payment will be Rs 3,848 crore, to be paid to the Ministry of Telecommunications by August 17. The report added that operators are generally expected to opt for this payment mechanism.

The people said that the short-term loan is expected to be refinanced when it matures.

The cash-strapped operator is also in talks with some public sector banks to raise around Rs 1,600-1,700 crore, according to ET, citing a person familiar with Vodafone Idea’s plans.

Bharti Airtel has approached Barclays, Citi, BNP Paribas, State Bank of India and other large public and private banks. Meanwhile, Vodafone Idea has to pay Rs 1,679 crore as the first instalment.

Airtel shares closed 0.85% lower at Rs 703.80 on the BSE on Tuesday, while Vodafone Idea shares closed 1.49% higher at Rs 8.84.

Airtel has announced plans to launch 5G services using a non-standalone model, with plans to launch in India by March 2024. The company’s chief executive, Gopal Vittal, said recently that 5G coverage plans are ready to cover around 5,000 towns and cities.

In the recent 5G auction, market leader Jio was the largest consumer, buying airwaves worth Rs 88,078 crore, followed by Airtel and Vi at Rs 18,799 crore.

India Ratings rated Airtel’s proposed CP at A1+, a standard rating. “Airtel’s spectrum footprint will be strengthened by gaining access to 5G bands,” the rating firm said on July 27.