Govt soon to become biggest shareholder in Vodafone Idea, will hold close to 33% stake

New Delhi: The cash-strapped telecom operator Vodafone Idea is trying hard to raise funds to stay afloat. In the latest bid, the firm said that it will reach out to its promoters for the ‘bailout fund’. Moreover, the government’s move to convert telco’s interest liability into equity will give a much need fillip to the company struggling to stay afloat.

According to agreement, the govt will convert Vodfaone-Idea’s interest liability of Rs 16,133 crore into equities and will in turn become the largest shareholder by acquiring 33 per cent share in the company.

Earlier in January, the Vodafone Idea had opted to convert its dues to stocks, a part of debt resettlement package by the government under which the telco would get moratorium on the deferred spectrum and the adjusted gross revenue (AGR) payment for 4 years.

This conversion will reduce company’s debt and will bring down stake of promoters Vodafone Group Plc & Aditya Birla Group, down to around 28.5% and 17.8% respectively. Together, they will have around 50% stake in the company but with 33% shares in govt kitty, the latter will be the biggest shareholder. Securities and Exchange Board of India (SEBI) is yet to give its final nod.

Vi had opted to pay AGR dues amounting to Rs 8,837 crore for FY18 and FY19 in 6 equal annual installments from March 31, 2026. Now, the govt is expected to convert Vi’s interest liability of ₹16,133 crore into equities.

However, the management of the company is likely to remain in the hands of promoters and government may not be part of it. The government may hold stake in the company as part of public ownership and not as promoter.