Vodafone Idea Equity Holding for Govt After Conversion

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Vodafone Idea

Vodafone Idea (Vi), on February 3, 2023, got the order from the Ministry of Communications to go ahead with the dues to the equity conversion process. On February 7, 2023, Vi informed the stock exchanges that the board of directors of the company had approved the allotment of 16,133,184,899 equity shares of the face value of Rs 10 each at an issue price of Rs 10 per equity share to the government. More specifically, it is the Department of Investment and Public Asset Management (DIPAM) that has been issued the shares. Post the allotment, a 33.44% stake in the company has gone to the government.

Read More - Next Three Months are Crucial for Vodafone Idea: Report

The Indian government went ahead with the equity conversion move at last because the Aditya Birla Group had promised that it would bring the necessary investments for Vodafone Idea (Vi). This significantly reduces the stake of the Aditya Birla Group and Vodafone UK from the ailing Vodafone Idea.

Because of the equity conversion, Vi would finally be able to raise funding from private investors. The telco is also going to approach the banks for the issuance of fresh loans. Vi has a very large debt mountain, and until the time the company starts adding more subscribers and improving the fundamentals of the business, things won't get anywhere.

Read More - Govt Expects Vi to Rollout 5G Soon: Report

Vodafone Idea is now the only private telecom operator in the country that has not launched 5G. But the telco said that it is running test networks in New Delhi. These test networks can't be latched on to by regular users. However, in a recent announcement, Vi said that Motorola tested its devices under the 5G network of Vi in Delhi.

Vi needs to raise funds so that it can place commercial orders for 5G equipment. While the telco has already done a lot to make sure that it can roll out 5G as soon as possible, there's still a need of access to funds. The vendors aren't going to expose themselves further by giving equipment to Vi in credit.

Reported By

Tanuja is a passionate technology and telecom buff who has been following the telecom industry for several years now.

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