Government may own up to 33% stake in Vodafone Idea: Reports

24 Jun 2022 , 10:43 AM

According to a government official who spoke to CNBC-TV18 on June 24, the government may own a 33 % share in the financially troubled cellular provider Vodafone Idea. Once Vodafone Idea’s balance sheet improves, the government will reduce its stock investment in the firm, according to sources speaking to CNBC-TV18.

The final permission from capital markets regulator Securities and Exchange Board of India (SEBI) is sought before the interest payments of Vodafone Idea worth Rs 16,000 crore be converted into government equity.

The government’s investment in Vodafone Idea falls under public ownership, not promoter ownership. According to CNBC-TV18 sources, no government candidates would be given a board seat following a 33 percent ownership stake in Vodafone Idea.

According to the official speaking to CNBC-TV18, the government is confident in the turnaround and would act as a silent investor in Vodafone’s Idea.

The government had previously agreed to Vodafone Idea’s plan to convert over Rs 16,000 crore in interest payments that were past due from a prior AGR moratorium into approximately 33 percent of the firm.

In terms of adjusted gross income up to the financial year 2018—19, telecom providers owe the government more than Rs 1.65 lakh crore. According to a recent assessment, the AGR liability for Bharti Airtel, Vodafone Idea, Reliance Jio, BSNL, and MTNL up to the financial year 2018—19 was Rs 31,280 crore, Rs 59,236.63 crore, Rs 631 crore, and Rs 5,009.1 crore.

In a legal filing with the stock markets, Vodafone Idea stated that its board had authorized financing Rs 436.21 crore from Vodafone Group firm Euro Pacific Securities through the issuance of preferred shares at a unit price of Rs 10.2 each or warrants at the same price.