Govt agrees to raise stake in debt-ridden Vodafone Idea to 49% with fresh share acquisition worth Rs.37,000 cr

Govt rings in 48.99% stake in Vi with Rs.36,950 cr Spectrum swap

The Government has agreed to raise the stake in Vodafone Idea to 48.99 percent with a fresh acquisition of shares worth Rs.36,950 crore in lieu of outstanding spectrum auction dues, the company said in a regulatory filing on Sunday. The Government of India is the single-largest shareholder in the debt-ridden Vodafone Idea with a 22.6 percent stake, controlled by Aditya Birla Group.

“The Ministry of Communications… In line with the September 2021 Reforms and Support Package for the Telecom Sector, it has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after the expiry of the moratorium period, into equity shares to be issued to the Government of India. The total amount to be converted into equity shares is Rs.36,950 crore,” the filing said.

Vodafone Idea (VIL) said it has been directed to issue 3,695 crore equity shares of the face value of Rs.10 each at an issue price of Rs.10 each within 30 days after issuance of the necessary order from relevant authorities, including from Securities and Exchange Board of India. “Post the aforesaid issuance of equity shares, the Government of India shareholding in the Company will increase from existing 22.60 percent to approximately 48.99 percent. The promoters will continue to have operational control of the company,” the filing said.

Kumar Mangalam Birla led Aditya Birla Group, which is running the debt-ridden Vodafone Idea. British telecom major Vodafone has let Birla Group run the affairs of the company. Presently, Vodafone Group holds a 22.56 percent stake, while the Aditya Birla Group holds 14.76 percent. In December 2024, UK-based Vodafone Group cleared dues of around Rs.11,650 crore, or about 109 million pounds, that it raised against shares of Vodafone Idea, according to a regulatory filing. Vodafone Group had pledged almost the entire stake in VIL to raise the debt. The pledge was created in favour of HSBC Corporate Trustee Company (UK) for the debt raised by Mauritius and India-based entities of Vodafone Group.

Vodafone Idea and other telecom companies under invoicing and non-payment of money to the Government (AGR – Adjusted Gross Revenue) was caught by the Comptroller and Audit General in 2016. Around Rs. Two lakh crore dues were caught by the auditor, forcing the telecom companies to remit money to the Government. All the telecom companies went up to the Supreme Court against the payment and lost the case. Cash-strapped Vodafone Idea offered their shares to the Government of India to settle the dues around Rs.80,000 crore.[1]

Reference:

[1] Six telecom companies hushed up over Rs.45000 cr: CAG – Mar 26, 2023, J Gopikrishnan

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