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The Government of India will convert Vodafone Idea’s (Vi) outstanding spectrum auction dues worth ₹36,950 crore into equity, significantly increasing its stake in the telecom company to 48.99% from the existing 22.6%, the company confirmed in a regulatory filing on Sunday, March 31, 2025.
This move makes the government the largest shareholder in the debt-ridden telecom firm, though the promoters will retain operational control.
Spectrum Dues Converted into Shares
As part of the equity conversion, the government will receive 3,695 crore shares at an issue price of ₹10 per share. Vodafone Idea has committed to issuing these shares within 30 days of the official order.
The decision aligns with the Telecom Sector Reforms and Support Package announced in September 2021, which aimed to provide relief to struggling telecom companies by offering a moratorium on deferred payments and options for converting dues into equity.
Regulatory Filing Confirms Government’s Increased Stake
Vodafone Idea’s filing with stock exchanges confirmed the development, stating:
“The Ministry of Communications, in line with the September 2021 Reforms and Support Package for the Telecom Sector, has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares to be issued to the Government of India.”
Following the issuance of these equity shares, the government’s stake will increase from 22.6% to approximately 48.99%, making it the dominant shareholder. However, Vi’s promoters will continue to manage the company’s operations.
Impact on Vodafone Idea and the Telecom Industry
The conversion of dues into equity is expected to ease Vodafone Idea’s financial burden, giving the company a stronger capital structure to focus on network expansion and 5G rollout. However, with the government now holding nearly half of Vi’s shares, questions remain about how this increased stake will influence strategic decisions.
Vodafone Idea will now proceed with the issuance of shares within the next 30 days. Analysts expect this move to provide temporary financial relief, but Vi will still need to raise fresh capital to compete with Reliance Jio and Bharti Airtel in the telecom market.
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