NEW DELHI, Mar 30: The Centre has decided to convert Vodafone’s spectrum auction dues worth Rs 36,950 crores into equity which will increase the government’s holding in Vodafone Idea to 48.99 per cent – up from 22.6 per cent. The government has been the single-largest shareholder in the debt-ridden Vodafone Idea.
Now it will receive 3,695 shares at issue price of Rs 10 a share, the company said in a regulatory filing on Sunday. The shares to be issued within 30 days of the order. The move is in line with the relief package announced for the telecom sector in September 2021.
The outstanding spectrum dues include deferred dues repayable after expiry of the moratorium period. The promoters will continue having operational control.
“The Ministry of Communications… in line with the September 2021 Reforms and Support Package for Telecom Sector has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares to be issued to the Government of India. The total amount to be converted into equity shares is Rs 36,950 crore,” the filing read.
“Post the aforesaid issuance of equity shares, the Government of India shareholding in the Company will increase from existing 22.60 per cent to approximately 48.99 per cent. The promoters will continue to have operational control of the company,” the filing read.
The Ministry of Communications on Saturday had directed Vodafone Idea to issue equity shares worth ₹36,950 crore to the government under Section 62(4) of the Companies Act. Vodafone received the communication on Sunday and is required to complete the issuance within 30 days, subject to approvals from relevant authorities, including the Securities and Exchange Board of India (SEBI).
The allocation will involve issuing 3,695 crore equity shares with a face value of Rs 10 each at an issue price of Rs 10 per share. The pricing has been 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, in accordance with Section 53 of the Companies Act, which prohibits issuing shares below their par value. Vodafone Idea stated that it will take all necessary steps to execute the share issuance upon receiving the requisite approvals.
(Manas Dasgupta)
