Vodafone Idea News: Company Converts ₹36,950 Crore Spectrum Dues into Equity for Government of India
In a significant development for India’s telecom sector, Vodafone Idea Limited (VIL) has announced that the Government of India will convert outstanding spectrum auction dues into equity shares. This decision aligns with the September 2021 Reforms and Support Package for the Telecom Sector, aimed at easing financial stress in the industry.
The Ministry of Communications communicated this decision to Vodafone Idea through an official order dated March 29, 2025, which the company received on March 30, 2025. Under this arrangement, the telecom giant will issue equity shares worth ₹36,950 crore to the government.
Key Details of the Vodafone Idea Equity Conversion
As per regulatory guidelines, Vodafone Idea will issue 3,695 crore equity shares with a face value of ₹10 each at an issue price of ₹10 per share. The company has 30 days to complete the process after receiving necessary approvals, including from the Securities and Exchange Board of India (SEBI).
The pricing of these shares is determined based on the higher of either the volume-weighted average price of Vodafone Idea’s stock over the last 90 trading days or the last 10 trading days preceding the “Relevant Date,” which is February 26, 2025. Additionally, the shares cannot be issued below their par value, as per Section 53 of the Companies Act, 2013.
Impact on Vodafone Idea’s Shareholding Structure
Following this transaction, the Indian government’s stake in Vodafone Idea will significantly rise from 22.60% to approximately 48.99%. Despite this increase, the company’s promoters will retain operational control, ensuring continuity in management and business strategy.
Next Steps For Vodafone Idea
Vodafone Idea has assured that it will take all necessary steps to complete the equity issuance upon receiving the required approvals. This move is expected to provide much-needed financial relief to the company, which has been struggling with high debt and stiff competition in the telecom market.
The development marks a crucial step in the government’s efforts to support the telecom sector while securing its financial interests in one of India’s leading telecom operators. Investors and stakeholders will now be closely watching the company’s next moves as it navigates its path to financial stability.
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