Government acquires new shares worth Rs 36,950 crore of Vodafone, stake will increase to 48.99%

On Sunday, Vodafone Idea (VIL) said in a regulatory filing that the government has agreed to increase its stake in the company to 48.99 percent. This step has been taken instead of outstanding spectrum auction liabilities. Under this, the government will acquire new shares worth Rs 36,950 crore of Vodafone.

The government already holds 22.6 percent of debt-ridden Vodafone Idea. With this new acquisition, it has become the largest shareholder of the company. Vodafone Idea will issue 3,6950 crore new shares in the next 30 days. They will have a face value of Rs 10 per share.

The Ministry of Telecommunications has directed the conversion of outstanding spectrum auction liabilities (deferred amounts included) into equity as a component of the telecom sector reform and support package announced in September 2021. Under this, a total of Rs 36,950 crore will be converted into equity shares. The Ministry of Telecommunications passed an order to that effect on March 29. Through which these shares will be allocated to the government.

Vodafone Idea said that it has been directed to issue a total of 3,695 crore equity shares at a price of Rs 10 per share. This order has been issued by the relevant authorities, including the Securities and Exchange Board of India (SEBI). The company said, after the issuance of this equity share, the government's stake will increase from 22.60 percent to about 48.99 percent. However, the promoters will retain operational control of the company.