Vodafone Idea on Tuesday allotted ₹36,950 crore worth of equity shares to the Government of India, converting its spectrum dues into equity.

With this, the Centre has emerged as the largest shareholder in the debt-laden telecom operator, now holding a 48.99% stake.

The allotment involved 3,695 crore equity shares of ₹10 each, issued at par.

This strategic move follows the company’s earlier announcement on March 30, made in line with the telecom relief measures outlined under the September 2021 Reforms and Support Package for the sector.

The shares were allotted under Section 62(4) of the Companies Act, 2013, after directions from the Ministry of Communications. Post-allotment, Vodafone Idea’s total paid-up share capital has expanded to ₹1.08 lakh crore, comprising over 10,834 crore shares.

Also read: SEBI exempts govt from open offer rule on Vodafone Idea debt-to-equity conversion

The government’s holding comes via the Department of Investment and Public Asset Management (DIPAM).

While the government has previously clarified it does not intend to run the company, the equity conversion offers much-needed financial relief to Vodafone Idea, enabling it to refocus on operations and compete more effectively in the Indian telecom space.

Shares of Vodafone Idea closed 2.58% lower at ₹7.18 apiece on the BSE ahead of the announcement.