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INDIAN GOVERNMENT SET TO TAKE MAJORITY STAKE IN VODAFONE IDEA

INDIAN GOVERNMENT SET TO TAKE MAJORITY STAKE IN VODAFONE IDEA

Context:

The Indian government will become the largest shareholder in Vodafone Idea after the operator's board approves the interest conversion on its arrears into equity.

Key Points:

  • Vodafone Idea, called Vi, has outstanding spectrum licenses and adjusted gross revenue.
  • The operator estimates the total interest rate for these dues is approximately INR160 billion ($ 2.2 billion).
  • Equity conversion will give the Indian government a 35.8% stake in the Vodafone Idea by reducing the interest of the operator's current shareholders. 
  • Vodafone Group's holdings will be reduced from 45.1% to 28.5%, while the Aditya Birla Group will be reduced from 26% to 17.8%.

Background:

  • In October 2021, the Indian government confirmed that it would implement the reforms proposed in September to ease pressure on the telecoms sector.
  • This included reducing the bank guarantees required for spectrum licenses, suspending spectrum payments for up to four years, and allowing operators to convert interest on spectrum capture into equity.

Vodafone Idea:

  • It is an Indian telecom operator.
  • Its headquarters are in Mumbai and Gandhinagar.
  • CEO - Ravinder Takkar
  • Founder: Kumar Mangalam Birla

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