The Indian government has decided to convert Vodafone Idea’s unpaid spectrum auction dues of Rs 36,950 crore into equity shares, thus increasing the government's stake in the telecom company from 22.6% to 48.99%. The conversion follows an order dated 29 March 2025, which the company received on 30 March. The company said this step is part of the telecom reforms announced in September 2021 to help struggling telecom companies.
However, despite the government’s higher stake, Vodafone Idea said its promoters, Vodafone Inc and Aditya Birla Group, will continue to manage the company. Before this, the promoters held 38.8% of the company. The government will remain a public shareholder in Vodafone Idea.
Vodafone Idea has informed stock exchanges that the government will receive 3,695 crore equity shares at Rs 10 per share. The share price was set based on SEBI rules, considering the 90-day and 10-day volume-weighted average price before 26 February 2025 (Relevant Date).
Vodafone Idea plans to complete the equity issuance within 30 days after getting approvals, including from SEBI.
This decision comes from the 2021 telecom relief package, which allowed telecom companies to delay spectrum payments and offered the option to convert dues into equity. The move is expected to improve Vodafone Idea’s financial position in a highly competitive telecom market.
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