Discussion Govt of India now holds 48.99% stake in Vi (Vodafone Idea)

[kanagadeepan]

what does this mean? GoI shares are not actually going up to 48.99% in one shot ???

I think so. Promoter Group Holding was 37.32% during Last quarters (Sep24 & Dec24). In Jan2025, Voda UK sold its remaining 3% stake in Indus Towers and bought back some shares in VoId (for Rs1910 crores, valued at Rs11.23, when market price was Rs7.83). So Promoter holding increased in Mar25 Qtr. Now the promoter holding is down to 25.5% as per VoId's PR stmt.

If this is really a single shot transaction, then Math isn't Mathing.

No, it means that the promoter group has bought back that deficit of approx 13% shares from other investors at the then market price of ₹6.81 per share and allotted them to the Government at the face value of ₹10 per share. Which is like an indirect discount to Vi on its dues to the government.

It is possible, but is that even Legal? Promoter buying 13% of shares from others at discount and selling it to Govt for higher price? Even if this is OK according to Govt, then Opposition will have a field day saying Govt wasting Public money for a Pvt Co. Further VoId Promoters have to report SEBI about this big transaction with full details (from whom DII / FII and at what price) before hand, right?

 

[Bapun]

The government has no plan to convert any further statutory dues of Vodafone Idea into equity, as it does not want to turn the private telco into a state-run company, communications minister Jyotiraditya Scindia told ET in an interview.

Won't raise stake in Vodafone Idea, telco must clear government dues: Jyotiraditya Scindia

Jyotiraditya Scindia clarifies the government will not increase its stake in Vodafone Idea. The aim is to prevent it from becoming a state-run entity. Starlink's permit is pending as it needs to meet all guidelines. The government is working towards making India Post profitable in the next five...

m.economictimes.com

 

[Koji]

The government has no plan to convert any further statutory dues of Vodafone Idea into equity, as it does not want to turn the private telco into a state-run company, communications minister Jyotiraditya Scindia told ET in an interview.

Won't raise stake in Vodafone Idea, telco must clear government dues: Jyotiraditya Scindia

Jyotiraditya Scindia clarifies the government will not increase its stake in Vodafone Idea. The aim is to prevent it from becoming a state-run entity. Starlink's permit is pending as it needs to meet all guidelines. The government is working towards making India Post profitable in the next five...

m.economictimes.com

Mr Birla and Vodafone UK CEO after reading this news

 

[hike]

Birla and Vodafone are doing nothing to improve condition they literally reduced MNP facilities used to available roadside.

 

[yellkey]

First, they must improvise their network coverage with stable internet and call quality. Then only can they expect their sustainability. Instead of optimizing their network, they follow other dogs and go behind what they can compete with the tech of the followed dogs.

Example: they hike the price, Vi also does the hike
They got 5G in most places, Vi also implements 5G in one tower for one state.

 

[Esmail]

To keep Vi afloat, the DoT is likely to convert another tranche of dues—potentially Rs 40,000 crore—into equity, pushing its stake to 75%, according to industry sources. This would dilute promoter holdings further but maintain their operational grip, raising questions about accountability.

Vodafone Idea: Govt Faces Stark Choice—Hike Stake To 75% Or Push Vi To NCLT

The Supreme Court’s dismissal of Vodafone Idea's (Vi’s) writ petition on 19 May, seeking a Rs 45,457 crore waiver on interest and penalties for Adjusted Gross Revenue (AGR) dues, has slammed the door on judicial relief, leaving the government in a dire bind: either increase its stake to 75 per...

www.businessworld.in

 

[kanagadeepan]

To keep Vi afloat, the DoT is likely to convert another tranche of dues—potentially Rs 40,000 crore—into equity, pushing its stake to 75%, according to industry sources. This would dilute promoter holdings further but maintain their operational grip, raising questions about accountability.

First, if Govt bought 75% ( even 50.01% for that matter from current 48.99% ) then VoId will become a PSU. Already Govt is dying to help BSNL. Some say VoId may get merged with BSNL. No, even MTNL is NOT getting merged with BSNL for last 5 years, due to their huge debt (much smaller than VoId's debt), let alone VoId. Two PSU (VoId & BSNL+MTNL as BSNL & MTNL are mutually exclusive) in Telecom is too many for Govt. Further there will be too many NEW Govt Staff under Govt pay-roll, whereas in BSNL/MTNL Govt is trying to cut staff using schemes like VRS. Just imagine VoId employees getting VRS offers??? Labour unions will have a great field day.

Second, this will be killing Airtel a lot, as they will be the only big Telco to pay FULL AGR + Penalty + Interest + Interest on Penalty. Knowing them, they will try all tricks in book to stop this from happening. Earlier Airtel asked Govt to repeat the same thing they have done to VoId wrt equity conversion (at discount -->> saying indirectly) and Govt was unable to answer them till now.

Third, Govt asking for Penalty + Interest + Interest on Penalty is nothing new for any industry and Govt never forgives those penalty / interest things and so they outright rejected VoId's claim of removing them, else it will become a bad precedent for them and all others in industry will ask for forgive the penalty / interest / interest on penalty shenanigans. But if Govt take-over the Co for the same will again become a bad precedent as well. All debt laden Co will pay very less Tax and file a rejection in Court and when the judgement comes after 10 to 20 years, they will just try to give their Co shares (worth nothing) and can leave like a saint. Here govt lost Taxes for decades and even after winning the case, they are the real Losers for adding more Govt employees from a Debt ridden / Loss making firm.

I think, this news is fake and was being circulated by FIIs & DIIs, so that those QIIs trying to make retail investors a scape-goat and plan some great escape with minimal loss (profit is a distant dream, but they will go to any level as well, imho).

 

[vikhyath]

To keep Vi afloat, the DoT is likely to convert another tranche of dues—potentially Rs 40,000 crore—into equity, pushing its stake to 75%, according to industry sources. This would dilute promoter holdings further but maintain their operational grip, raising questions about accountability.

Vodafone Idea: Govt Faces Stark Choice—Hike Stake To 75% Or Push Vi To NCLT

The Supreme Court’s dismissal of Vodafone Idea's (Vi’s) writ petition on 19 May, seeking a Rs 45,457 crore waiver on interest and penalties for Adjusted Gross Revenue (AGR) dues, has slammed the door on judicial relief, leaving the government in a dire bind: either increase its stake to 75 per...

www.businessworld.in

So technically, Vi would become a PSU! If this happens, the only viable option might be to merge MTNL and Vi, since both are listed companies, unlike BSNL. This would automatically make MTNL a pan-India network. Yet another white elephant might be born, but perhaps that's still better than a duopoly.