02 April 2025
Vodafone Idea (Vi) has announced a critical development as the Indian government has converted INR369.5 billion in debt into equity. This transaction increases the government's stake in Vodafone Idea from 22.6% to an impressive 49%.
The equity conversion is part of a government relief initiative launched for the telecom sector back in 2021, which allowed the government the option to convert spectrum auction fees owed by Vi into shares. This decision comes at a time when Vodafone Idea is grappling with a staggering total debt load of $25 billion, with about $18 billion of that linked to unpaid spectrum dues to the government.
This latest equity conversion marks the second instance in which the Indian government has taken such action regarding Vodafone Idea's debt. In 2023, the government converted INR161.3 billion of interest owed on spectrum and license fees into a 33% equity stake, which was subsequently diluted to 22.6% following the company’s $2.16 billion follow-on public offering last year.
As Vodafone Idea navigates its financial challenges, this move by the government represents a critical step in efforts to stabilize the operator and reinforce its position in an increasingly saturated telecom market.
