In a notable move, the Government of India (GOI) converted the interest payment obligations of Vodafone Idea (VI) during the moratorium period into preferential equity. This strategic decision resulted in the GOI acquiring a 32.09% stake in the company, equating to access to 16.13 billion shares, as detailed on page 18 of the EGM minutes dated January 31, 2023. The total interest amount considered for this conversion was approximately Rs 16,000 crore. According to a Press Information Bureau release dated September 25, 2021, this initiative aimed to alleviate financial stress in the telecom sector and preserve its competitiveness. This article seeks to analyze whether the GOI should sell its shares in VI post-moratorium and project the potential ownership trajectory from 2025 onwards, following the moratorium’s expiry on September 25, 2025.
VI’s Yearly Payment Obligation to the GOI from FY25
The data below, extracted from Vodafone Idea’s (VI) latest annual report, outlines VI’s yearly payment obligations to the Government of India starting from the financial year 2025. It’s important to note that these figures do not account for the cash outflows from the recent spectrum auction in 2024, which are expected to be marginal.
