Govt to Raise Stake in Vodafone Idea to 48.99%

31 Mar 2025 , 11:53 AM

India’s government will raise its share in Vodafone Idea Limited (Vi) to around 48.99% through the conversion of outstanding spectrum auction dues into equity shares. Vodafone Idea disclosed this development on March 30, 2024, following an official directive from the Ministry of Communications issued on March 29, 2024. This comes in-line with the telecom sector relief package unveiled the previous month in September 2021 to help financially pressured telecom operators.

In April, the government directed Vodafone Idea to convert dues of ₹36,950 crore into equity shares under Section 62(4) of the Companies Act, 2013. The company had received this direction on March 30, 2024 and has to issue the shares within 30 days of the directive, pending necessary approvals from regulatory bodies such as Securities and Exchange Board of India (SEBI).

Vodafone Idea will issue a total of 3,695 crore equity shares to the government at a face value of ₹10 per share and an issue price of ₹10 per share as part of the transaction.

The issue price has been finalized at the higher price of the following:

• This is the volume-weighted average price (VWAP) for the previous 90 trading days.
• The VWAP over the past 10 trading days preceding February 26, 2025.
• This pricing structure is in line with the cool off period as laid out in section 53 of the Companies Act, 2013, which prevents issuing shares-by-issue prices lower than the par value.

After the share issuance, the government will hold around 48.99% in the debt-laden telecom firm, up from 22.60%, becoming its largest shareholder. However, Vodafone Idea has stated that its promoters would not relinquish operational control of the company despite the heightened stake. Vodafone Idea said that it would take all steps necessary to effect the share issuance as and when approvals from regulatory authorities are obtained.