Telecom operator Vodafone Idea on Tuesday
announced that the Indian government will be the owner of its 35.8%
share. The board meeting held on Monday approved the conversion of around Rs 16,000 crore of interest related to spectrum auction instalments and Adjusted Gross
Revenue (AGR) Dues into equity.
The conversion will therefore result in
dilution to all the existing shareholders of the company, including the
promoters. After the conversion, Vodafone Group would hold around 28.5%
and Aditya Birla Group around 17.8%, India’s third-largest telecom
Here is all you need to know about the
*The Indian government has become the
largest shareholder of Vodafone Idea after the conversion of dues into equity.
*On March 20, 2017, Britain’s Vodafone
Group, the world’s second-largest company, merged its Vodafone India Limited
(Vodafone) with Idea Cellular (Idea) to build India’s most lucrative company
estimated at $12.5 billion.
*Vodafone Idea has paid the government Rs 7,854 crore in dues but still owes roughly Rs 50,000 crore.
*Following Tuesday’s announcement, Vodafone Idea’s
share value dropped to nearly 19% after the telecom operator approved
the conversion of spectrum interest and government dues into equity. The stock
plunged to a day low of Rs 12.05 on BSE.
*The rescue plan was crucial for Vodafone
Idea since it has been losing customers to bigger rivals
*India’s telecom market has been disrupted
in 2016 by the entry of Reliance Jio which forced other players to struggle to
survive in the Indian market.
*The likes of Vodafone India and Article
further suffered blows due to the COVID-19 pandemic.
*Earlier this month, Bharti Airtel had announced that it would not avail the option of conversion of the interest on the deferred spectrum and AGR dues into equity, under the reforms package.