Government Bolsters Stake in Vodafone Idea to Nearly 49%

The government of India will raise its stake in Vodafone Idea to 48.99% by converting outstanding spectrum auction dues into equity shares valued at Rs 36,950 crore. As the largest stakeholder, the government aims to stabilize the debt-ridden telecom company while promoters retain operational control.

The Indian government has decided to substantially increase its stake in Vodafone Idea to 48.99%, according to a regulatory filing submitted by the company on Sunday. This move will be facilitated through the conversion of outstanding spectrum auction dues into equity worth Rs 36,950 crore.

A decision reflecting the 2021 Reforms and Support Package for the Telecom Sector, the Ministry of Communications will oversee the conversion. Vodafone Idea will issue 3,695 crore equity shares at a face value of Rs 10 each following approval from relevant authorities, including the Securities and Exchange Board of India, within the stipulated time frame.

Post conversion, the government will emerge as the single-largest shareholder with its stake rising from 22.6% to nearly 49%. Despite this increase, Vodafone Idea's promoters will maintain operational control of the company as they continue efforts to alleviate its financial burdens.

(With inputs from agencies.)