Vodafone Idea (Vi) is soon going to give the Indian government equity against the interest dues worth Rs 16,133 crore. Vi was the only telco to go ahead with this option, and it makes sense because the telco wasn’t making money. Bharti Airtel, on the other hand, was in a position where it was generating free cash flows and deleveraging as fast as possible and thus didn’t require to give the centre any equity against the removal of dues.
According to a CNBC-TV18 report, Vodafone Idea Limited’s equity conversion for the government is going to happen soon. This would make the Indian government the biggest shareholder in the telco. But there’s one thing you should know. Vi won’t be controlled by the government.
Vodafone Idea is Not Giving Board Seats to Government
The Indian government will not be getting any board seats for its stake in Vodafone Idea. The stake that will be offered to the government will be in the nature of what is given to the general public. Back in 2021 as well, the Indian government had clarified that it doesn’t want to intervene in the business process of Vodafone Idea. Thus, the business will keep running the way it is but just with fewer issues and liabilities.
Vodafone Idea is currently in the process of raising Rs 436 crore from its current largest promoter – Vodafone Group UK. The stakes of the Aditya Birla Group (ABG) and the Vodafone Group UK would go down significantly once the telco gives away its stake to the central government.
Vi had proposed earlier that the government will get an equity stake of 35.8% in the company against the interest dues in concern. Livemint had reported that the centre would soon hire a transaction advisor who will work with the finance ministry and the Department of Telecommunications (DoT) to determine how much stake the government would get in the company.