Vodafone Idea Shares Rise 10% Govt Converts Rs 36,950 Cr Dues Into Equity; Should You Buy? – News18
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Govt’s shareholding in Vodafone Idea will increase from 22.6% to 48.99% following the conversion of dues into shares worth Rs 36,950 crore.
Vodafone Idea Share Price
Vodafone Idea Ltd. (VI) shares rose 10 per cent in Tuesday morning trade after the telecom operator announced that the Central government will convert its outstanding spectrum dues into equity shares.
VI plans to issue 3,695 crore equity shares at a price of Rs 10 per share, which will convert dues worth Rs 36,950 crore into stock. However, the last closing price for Vodafone Idea shares was Rs 6.8 each.
After the conversion, the Indian government’s stake in Vodafone Idea will rise from 22.6% to 48.99%. The company clarified that the promoters will maintain operational control despite the government’s increased stake.
The issue price was set based on the volume-weighted average price from the last 90 trading days or the preceding 10 days (up to February 26, 2025), in accordance with the Companies Act, 2013.
Vodafone Idea confirmed in a statement that the Ministry of Communications issued an order on March 29, 2025, approving the conversion in line with the September 2021 Telecom Reforms Package. The company officially received the order on March 30.
This marks the second time the government has converted Vodafone Idea’s debt into equity. In 2023, Rs 16,133 crore of debt was converted at the same Rs 10 per share price.
Citi Research, an international brokerage, has reaffirmed its “buy” rating on Vodafone Idea following the government’s move, maintaining a target price of Rs 12 per share, suggesting a potential upside of around 76% from the last closing price.
However, Citi Research noted that while the conversion alleviates Vodafone Idea’s immediate financial pressure, the company still faces challenges in raising fresh funds for expanding its 4G and 5G networks.
Vodafone Idea shares have dropped more than 50% in value over the past year, reflecting investor concerns about the company’s financial struggles and uncertain future growth prospects.
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