New Delhi/ Mumbai: In a fresh lifeline Vodafone ideaThe government has decided to convert spectrum dues of Rs 36,950 crore into equity, making it the largest shareholder with a holding of about 49%in the telecom company.
After the new issue of shares to the Center, the holding of promoters will fall from 39% to 26%. especially, Vodafone Group PLCThe stake in the Indian unit will fall from 29% to 16%, which will limit the ability to veto special resolutions. The ownership of Aditya Birla Group President Kumar Mangalam Birla and his allied institutions will be reduced from 10% to 9.4%.
Despite these changes, the promoters will maintain the operating control of the country’s third largest mobile service provider, in accordance with the earlier government’s decision, a source told TOI.
The latest bailout is considered important for the company as it would free the cash flow, which would have moved towards the government’s outstanding payment, and will enable it to invest in CAPEX, especially the rollout of 5G services, where it is absent, stopping in Mumbai. Better services, in turn, will help the customer improve billing. Not only the company has seen the average revenue of the user about Rs 160 per month – two -third levels of rival Bharti Airtel (Rs 245) and 25% less than Reliance Jio (Rs 203) – but it has also lost premium customers.
At the end of the Dec, TRAI data gave the market share of Vodafone Idea 18% and 18% for Airtel compared to 18% compared to 18%.
The government’s move will also reduce cash outgo as interest is calculated on arrears, and more liability is carried forward. During a presentation for analysts, the company management estimated the government’s dues for about 2.1 lakh crore rupees. In the next financial year, it was necessary to pay around Rs 30,000 crore for the government towards spectrum and AGR arrears, with an estimated amount to proceed in 2026–27. However, these liabilities are now hoping to come down.
The latest conversion is also expected to provide comfort to banks, which can provide fresh loans, especially after raising recent funds by Vodafone idea.
Govt Vodafone is also supporting the Vodafone idea as well as BSNL as it is eager to ensure that there are at least three private players and a strong state-operated unit to ensure that consumers have enough options and competition is healthy that the field was turning into a couple with Reliance Jio and Bharti Airtel.
Although the government will become the largest shareholder, it will still be classified as a public shareholder. In 2022, when the Center initially converted the outstanding interest arrears into equity by converting 33% stake, it was exempted from Vodafone Idea shareholders to offer an open offer.
