Government stake in Vodafone Idea to jump to 48.99% after ₹36,950 crore equity conversion

Vodafone Idea is set to cede nearly half its ownership to Centre, marking a pivotal moment in the telecom sector’s ongoing overhaul. On Sunday, the company said it will issue fresh equity shares worth ₹36,950 crore, raising the Centre’s stake in the struggling telco to 48.99%.

The move follows the government’s 2021 telecom relief package and comes just weeks after CEO Akshaya Moondra made a direct appeal to the Department of Telecommunications for urgent equity conversion approvals. 

The fresh infusion is expected to ease pressure from mounting dues and regulatory payouts.

The equity conversion is part of the September 2021 Reforms and Support Package for the Telecom Sector. Vodafone Idea (VI) said its outstanding spectrum auction dues—including those deferred and repayable after the moratorium period—will be converted into equity shares issued to the Government of India under Section 62(4) of the Companies Act, 2013.

The acquisition was conveyed to the company via an order dated March 29 and received on Sunday.

As per the directive, VI will issue 3,695 crore equity shares of face value ₹10 each at an issue price of ₹10 per share. The company must complete the issuance within 30 days of receiving necessary regulatory clearances, including from the Securities and Exchange Board of India (SEBI).

The pricing of the shares has been determined based on the higher of the volume-weighted average price over the last 90 trading days or the last 10 trading days preceding the relevant date, which is February 26, 2025. This is subject to Section 53 of the Companies Act, 2013.

Following the issuance, the government’s holding will jump from 22.60% to approximately 48.99%. Despite the increased stake, operational control will remain with the promoters—UK’s Vodafone Plc and the Aditya Birla Group.

VI said it will take all necessary steps to complete the equity issuance once all approvals are in place.

The announcement comes shortly after CEO Akshaya Moondra urged the Department of Telecommunications to fast-track the approval of equity conversions totaling ₹36,950 crore. “On an NPV (net present value) protected basis, which would boost the government shareholding in VI to 49%,” Moondra had said in his appeal.