Government to Increase Stake in Vodafone Idea

The central government has agreed to increase its stake in Vodafone Idea (VI), a leading telecom company in India. In exchange for the spectrum auction dues owed by the company, the government will convert the outstanding amount into equity shares in Vodafone Idea.

The company announced in a regulatory filing on Sunday that the government has decided to purchase additional shares worth Rs 36,950 crores. As a result, the government will become the largest shareholder in Vodafone Idea, holding a 22.6% stake in the company.

According to the Communications Ministry’s reforms in September 2021, which were part of the telecom support package, the government decided to convert the outstanding spectrum auction dues, including deferred payments, into equity shares in the company. The total amount to be converted into equity shares is Rs 36,950 crores. After the required orders are issued by the Securities and Exchange Board of India (SEBI) and other relevant authorities, Vodafone Idea will issue equity shares with a face value of Rs 10, worth Rs 3,695 crores, at an issue price of Rs 10 each, within 30 days.

After this issuance, the government’s stake in the company will increase from the current 22.6% to 48.99%. However, the promoters will continue to maintain operational control over the company, as stated in the filing.