The Indian government is set to increase its stake in Vodafone Idea Limited (Vi) to approximately 48.99 percent after converting outstanding spectrum auction dues into equity shares. The telecom company disclosed the development today, aligning with the sectoral relief package introduced in September 2021.
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Government's Stake in Vi Set to Rise
In an order dated March 29, the Ministry of Communications directed Vodafone Idea to issue equity shares worth Rs 36,950 crore to the government under Section 62(4) of the Companies Act, 2013. The company received the directive today and must complete the issuance within 30 days, pending approvals from regulatory authorities, including the Securities and Exchange Board of India (SEBI).
As part of the transaction, Vodafone Idea will issue 3,695 crore equity shares with a face value of Rs 10 each at an issue price of Rs 10 per share. The pricing is determined based on the higher of the volume-weighted price over the last 90 trading days or the last 10 trading days before February 26, 2025, as per Section 53 of the Companies Act, which prohibits issuing shares below par value.
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Regulatory Approvals and Compliance
Post-issuance, the government's stake in Vodafone Idea will surge from 22.60 percent to nearly 48.99 percent, making it the largest shareholder. However, the company reassured stakeholders that the promoters would retain operational control.
"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," Vodafone Idea said in an exchange filing on March 30, 2025.
"The Company will take all necessary actions to undertake the aforesaid issuance, upon receipt of the requisite approvals," Vodafone Idea added.
