Vodafone Idea’s stock fell 2.4 per cent to ₹13.05 on the BSE on Wednesday even after the government converted ₹20,000 crore of the telco’s adjusted gross revenue (AGR) dues into 33 per cent equity, according to thehindubusinessline.com.
The conversion, approved by the Cabinet on Tuesday, extinguishes the equivalent amount of the company’s statutory liabilities and leaves the government holding about one-third of the carrier. The Department of Telecom issued the formal order on the same day, thehindubusinessline.com reported. Despite the balance-sheet relief, traders focused on the operator’s need to raise at least ₹20,000 crore in fresh equity from external investors by September to fund 5G rollout and meet looming debt repayments.
The move places Vodafone Idea among the few Indian telecom firms to have a significant sovereign stake, comparable to the government’s residual shareholding in erstwhile VSNL after its privatisation. Analysts cited by thehindubusinessline.com note that the carrier’s cash burn remains high, with annual spectrum and AGR instalments of roughly ₹40,000 crore still outstanding. Rivals Reliance Jio and Bharti Airtel have already deployed pan-India 5G networks, widening the gap in average revenue per user.
The company has appointed SBI Capital and Bank of America to run a formal fund-raise process and is in talks with global infrastructure funds, thehindubusinessline.com added. A successful equity infusion is expected by the second quarter of FY25, with the first tranche of ₹10,000 crore targeted for July.