Govt asks Vodafone Idea to convert interest dues into equity.
The Indian government approved a bailout for debt-ridden telecom companies in the country and reserved the right to convert shares in them into shares at a later date. Last year Vodafone Idea’s board approved a plan to give the Indian government a 36% stake in the company. The company later reported that the Indian government did not want to take over the company’s operations.
From research, it is recorded that the India has become 2nd largest wireless Market.
Government on Friday agreed to transform Vodafone Idea’s hobby dues into fairness, stated the telecom corporation in an inventory alternate submitting.
Vodafone Idea on Friday stated that authorities directed it to difficulty stocks really well worth Rs 16,133.1 crore at a difficulty charge of Rs 10 in step with share, directing the organization to transform the NPV of the hobby associated with deferment of spectrum public sale instalments and AGR dues into fairness stocks to be issued to the authorities of India,” the submitting stated. Vaishnaw had remaining month stated Vodafone Idea has numerous requirements, inclusive of infusion of capital, and discussions round this had been on.
More About Vodafone Idea
Vodafone Idea Limited is a telecommunications company formed by the merger of Vodafone India and Idea Cellular in 2018. The merger created the largest mobile network operator in India with over 408 million subscribers. The combination aimed to better compete with other major players in the market, such as Bharti Airtel and Reliance Jio, by offering a wider range of services and increased network coverage. The company has faced financial challenges, including high debt and intense competition, and has been working to improve its revenue and profitability.
Vodafone Idea Limited is a publicly traded company, with its shares listed on the National Stock Exchange and Bombay Stock Exchange in India. The stock performance of Vodafone Idea has been impacted by various factors, including intense competition in the telecommunications market, regulatory changes, and the company’s high debt levels. Despite these challenges, the company has been taking measures to improve its financial performance, and its shares have seen fluctuations in recent months. It’s always recommended to do thorough research and consult with a financial advisor before making any investment decisions.
Vodafone Idea and all its dues
Govt asks Vodafone Idea to transform interest dues into equity well worth Rs 16,133 crore at Rs 10 in step with share ‘We had sought a corporation commitment that Aditya Birla Group might run organization and convey important investments,’ says Telecom Minister Ashwini Vaishnaw. Government on Friday agreed to convert Vodafone Idea’s interest dues into fairness, stated the telecom company in a stock trade filing.
Vodafone Idea on Friday stated that authorities directed it to issue equity worth Rs 16,133.1 crore at a issue rate of Rs 10 per share. The dues are owed by the telco to the authorities to be used of airwaves inclusive of the interest associated with bills for spectrum. Last year, the telecom branch had computed the internet gift fee (NPV) at the interest on spectrum and changed gross sales (AGR) on deferred statutory dues at Rs 16,133.1 crore.
History of Vodafone Idea
Earlier, VIL had stated that with conversion of dues into equity, the government get round 33% stake withinside the organization. “We had sought a corporation dedication that Aditya Birla Group might run organization and convey important investments. Birlas have agreed and as a result we have got agreed to transform. We need India to be three-participant marketplace plus BSNL and make sure healthful opposition for consumers,” stated Telecom Minister Ashwini Vaishnaw. ”Ministry of Communications…handed an order these days i.e., 3 February 2023 directing the organization to transform the NPV of the interest related to deferment of spectrum public sale instalments and AGR dues into equity stocks to be issued to the authorities of India,” the submitting stated.
The organization has been directed to issue 1613,31,84,899 equity stocks of the face fee of Rs 10 every at a issue rate of Rs 10 each. The remedy for the organization comes as a part of the reforms package deal introduced with the aid of using the authorities in September 2021. Shares of VIL closed at Rs 6.89 apiece on Friday on the BSE, up with the aid of using 1.03 consistent with cent in comparison to preceding close. In October 2022, marketplace regulator Sebi authorized the conversion of Vodafone Idea dues into equity.
In 2021, Centre authorized a rescue package deal for debt-strapped telecom companies, letting them convert hobby on deferred adjusted gross sales owed to the authorities into fairness. India’s telecom quarter become disrupted with the aid of using the access of Mukesh Ambani’s Reliance Jio and the quarter‘s problems had additionally been compounded with the aid of using huge dues owed to the authorities. In 2020, Supreme Court gave telecom corporations 10 years till 2031 to clean the dues. Vaishnaw had remaining month stated Vodafone Idea has numerous requirements, inclusive of infusion of capital, and discussions round this had been on. ”Vodafone (Idea) has many requirements.
Liabilities of Vodafone Idea
It has a specific requirement of capital. How lots capital, who will infuse? All the ones’ matters are under discussion at this factor of time. The duty of capital has to return back from numerous sources. The organization simply would not require conversion, it requires capital. All the ones’ matters are a complicated difficulty,” Vaishnaw had stated. The organization has 24.3 crore cellular subscribers accounting for 21.33 per cent marketplace share, as per present day statistics posted with the aid of using telecom regulator Trai.
VIL is the only telecom operator that’s to place buy orders for 5G services system and has been suffering to pay dues of its vendors. Indus Towers closing month made provision of doubtful debt well worth Rs 2,298.1 due to troubled balance sheet of VIL. It is in system of issuing optionally convertible debentures of as much as Rs 16 hundred crore to supplier American Tower Corporation to repay its dues. As on September 30 this year, the organization‘s overall gross debt, except for rent liabilities and inclusive of interest collected however now no longer due, stood at Rs 2,20,320 crore. The organization has made numerous tries to raise capital from investors but failed because of the adverse market situation and massive debt on its balance sheet.
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