The Vodafone Idea (Vi) will soon give the Government of India fairness to interest worth Rs 16,133. Vi was the only telco advancing this option, and it makes sense because the telco wasn’t making money. Bharti Airtel, on the other hand, was in a position to generate free cash flow and reduce leverage as quickly as possible, so there was no need to give the center fairness to the elimination of membership fees.
According to a CNBC-TV18 report, Vodafone Idea Limited’s government stock conversion is coming soon. This makes the Government of India the largest shareholder of the telephone company. But there is one thing you need to know. Vi is not controlled by the government.
Vodafone Idea does not give the government a board seat
The Government of India will not win a seat on the board to invest in Vodafone Idea. The stakes offered to the government are of the nature of what is offered to the general public. In 2021, the Government of India made it clear that it did not want to intervene in Vodafone Idea’s business process. Therefore, the business will continue to run as it is, but with less problems and less debt.
Vodafone Idea is currently in the process of raising Rs 43.6 billion from its largest promoter, Vodafone Group UK. The stake in Aditya Birla Group (ABG) and Vodafone Group UK will decline significantly when the telco transfers its stake to the central government.
Vi had previously proposed that the government acquire a 35.8% stake in the company for interest of concern. Livemint reported that the center will soon work with the Treasury and the Telecommunications Bureau (DoT) to hire a trading advisor to determine how much the government will invest in the company.
