The Indian government has reportedly expanded its ownership stake in Vodafone Idea from 22.6% to 48.99% by converting around INR369.5 billion (US$4.3 billion) of the telco’s spectrum payment dues into equity shares.
According to ETTelecom, the transaction – which was ordered by the Ministry of Communications on Saturday – will provide financial relief to Vodafone Idea, who was faced with the prospect of having to pay INR291 billion in adjusted gross revenue (AGR) dues in March 2026.
Vodafone Idea owed the dues as part of a Supreme Court decision in October 2019 that ordered telcos to pay a combined INR1.47 trillion (US$17 billion) in legacy AGR dues to the government. In September 2021, the government approved a moratorium on AGR dues payments that expires in March-April 2026.
India’s Department of Telecommunications (DoT) had planned to waive 50% of interest and all penalties and interest on penalties that make up almost 75% of the INR1.47 trillion figure, more than half of which would have accrued to Vodafone Idea.
However, it dropped the plan earlier this month after officials at higher levels of the government objected that it would also benefit Bharti Airtel, who could afford to pay its AGR dues.
The government's increased stake will lower Vodafone Idea’s liabilities to INR110 billion, while its annual instalment will be reduced from INR430 billion to INR170 billion, the report said. Vodafone Idea held a cash position of INR120.9 billion at the end of 2024, while its current market capitalisation stands at INR486.1 billion.
The transaction also makes the Indian government Vodafone Idea’s largest single shareholder. Vodafone’s share in the telco will shrink from 24.4% to around 16.1%, while Aditya Birla Group’s share will drop from just over 14% to 9.4%, the report add3ed.
