Vodafone Idea's Mounting Debt: Government Steps In with Increased Stake

The debt of Vodafone Idea Ltd increased by 7% to Rs 2.17 lakh crore in December 2024 due to a rise in statutory liabilities. The government has now increased its stake to 48.99% by converting Rs 36,950 crore of dues into equity. Debt repayment obligations include payments to the government and financial institutions.

Vodafone Idea's financial strain continues as its debt surges by 7% to reach Rs 2.17 lakh crore by the end of December 2024, primarily driven by higher statutory liabilities. This hike highlights the ongoing challenges faced by the telecommunications giant amidst fluctuating market conditions and regulatory pressures.

The debt breakdown shows a substantial Rs 2,14,700 crore committed to government obligations, alongside a reduced debt of Rs 2,300 crore owed to banks and financial institutions, a significant drop over the past two years. These figures underscore the company's strategy to manage its hefty financial commitments while navigating the industry's shifting landscape.

Further complicating matters, the Indian government has increased its stake in Vodafone Idea from 22.6% to 48.99%, following the conversion of Rs 36,950 crore in dues into equity. This move, which includes spectrum dues stretching into FY 2028, reflects a deeper involvement in the company's operations, seeking to stabilize its economic footing and ensure sustainable growth moving forward.

(With inputs from agencies.)