The Indian government will increase its stake in Vodafone Idea (VI) from 22.6% to 48.99% by converting Rs 36,950 crore of dues into shares. Following this announcement, VI’s stock surged 20% on April 1, while Indus Towers’ shares also rose by 7%.
Vodafone Idea will issue 3,695 crore shares at Rs 10 each to settle its dues, even though its last closing price was Rs 6.8 per share. By 12:15 PM, VI’s shares were trading at Rs 8.1 on NSE, up 19%, while Indus Towers’ stock climbed to Rs 357.35, gaining 6.9%.
Despite the government’s larger stake, the company assured that promoters will continue managing operations. The share price for this conversion was calculated based on the average trading price over the past 90 or 10 days before February 26, 2025, as per regulations.
Vodafone Idea stated that the Ministry of Communications approved converting its dues into equity on March 29, 2025, under the Telecom Reforms Package. The company received the order on March 30.
This is the second time the government has taken this step. In 2023, Rs 16,133 crore of debt was converted into shares at Rs 10 per share.