Govt to carry Vodafone Idea shares through SUUTI, course of to be over in ‘coming months’

Debt-laden telecom service supplier, Vi, previously Vodafone Idea, which opted for the interest-to-equity conversion scheme of the Department of Telecommunications (DoT), will problem the 35.8 per cent shares to the federal government on a preferential foundation via the Specified Undertaking of the Unit Trust of India (SUUTI), the corporate’s managing director and chief government officer, Ravinder Takkar, stated.
“Following conversion, the government will likely hold around 35.8 per cent stake while both the promoters (Vodafone Group and Aditya Birla Group) will jointly 46.3 per cent. The equity shares will be issued post confirmation of the final amount, as well as some procedural clarifications from the DoT. We believe the entire exercise will be completed in the coming months,” Takkar stated at a digital press convention on Wednesday.
Currently, Vodafone Group owns near 45 per cent of Vodafone Idea, whereas Aditya Birla Group owns roughly 28 per cent stake.
Vi had early morning on Tuesday stated that its board of administrators had accepted the corporate’s plan to go for the DoT’s supply of changing curiosity on deferred spectrum public sale funds and adjusted gross revenues (AGR) to fairness.

In its launch to the exchanges, Vi stated the online current worth of curiosity associated to spectrum public sale dues and AGR would come to round Rs 16,000 crore.
Since the common worth of Vi’s shares on August 14, 2021, which the Supreme Court determined could be the closing date, was under par worth, the corporate would problem shares to the Government at par worth of Rs 10 per share.
By one other decision, the present promoters additionally agreed to amend the shareholder settlement and introduced down the minimal qualifying shareholding threshold from 21 per cent to 13 per cent.
This signifies that each Vodafone Group and Aditya Birla Group will proceed to carry rights to make essential choices in regards to the firm, corresponding to appointment of administrators and different key officers.
On Wednesday, Takkar additionally clarified that although the federal government could be the only largest shareholder publish the fairness conversion, it had not expressed any curiosity in working the corporate.
“In all of our interactions with the government…it has been very clearly stated that they do not want to run this company. They do not have the desire to take over the operations of the company. They want three private players in the market and certainly do not want a duopoly or monopoly,” Takkar stated.
Vi, which is reeling underneath debt in extra of Rs 2 lakh crore, has been trying to elevate funds from buyers for fairly a while. The authorities’s supply of deferred fee of adjusted gross income dues got here as a significant breather for Vi, which owed the Department of Telecommunications (DoT) greater than Rs 58,000 crore simply as AGR.
On Wednesday, Takkar additionally stated that its plans to boost funds may materialise quickly. He, nevertheless, refused to supply any particulars on the timeline.
Analysts, nevertheless, consider that to ensure that the corporate to outlive the long term, it must elevate tariff within the coming occasions, and purpose for a mean income per person (ARPU) of as much as Rs 300, which is sort of thrice the present ARPU of Rs 109.