Debt-ridden telecom service provider Vodafone Idea Ltd. will now have the government become its single-largest shareholder as it has decided to convert the spectrum dues owned by the company into equity.

Post this exercise, the government will hold 48.99% stake in the company, in comparison to the 22.6% stake it currently owns.

Shares will be issued at a price of ₹10 apiece, which is a discount of 32% to Vodafone Idea’s closing price last Thursday. The stock will be reacting to this development on Tuesday due to Monday’s trading holiday.

As of last Thursday’s closing, Vodafone Idea’s shares were trading 38% below the price of ₹11, which is the price at which it issued shares to institutions last year during its Follow-on Public Offer (FPO). The telecom operator had raised ₹18,000 crore through India’s largest FPO till date.
At the time of its FPO last year, Vodafone Idea had 36.18 lakh retail shareholders, or those with an authorised share capital of up to ₹2 lakh. These shareholders had 3.7% stake in the company at the end of March 2024. By the end of the year, that number went up to 58.34 lakh shareholders, who have a 7.63% stake in the company.

Vodafone Idea will soon disclose its March quarter shareholding data for 2025, which will show whether retail investors continued to hold on to the stock during this corrective phase, or have made an exit.

The stake of India’s domestic Mutual Funds has also increased to 3.66% by December 2024 from 2.06% in March last year. However, no single fund has a stake in excess of 1%, as evident from the shareholding pattern.

Vodafone Idea had recently launched its 5G services in Mumbai and has mentioned that it now plans to expand its coverage into other parts of the country.

Shares of Vodafone Idea had ended 1.7% lower on Thursday at ₹6.8. The stock has declined 10% over the last one month and is down 64% from its 2024-high of ₹19.18.

Also Read: Explainer | Govt converts Vodafone Idea’s debt to equity: Key details and future outlook