Govt May Pick Up Stake in Vodafone Idea but Won’t Infuse Funds: ET Report

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Govt May Pick Up Stake in Vodafone Idea but Won’t Infuse Funds: ET Report
Credit: © Reuters.

By Aditya Raghunath -- A report by The Economic Times on September 15 said that government sources have told them the government is open to picking up a stake in Vodafone Idea Ltd (NS: VODA ). However, the government will not be infusing any funds into the beleaguered debt-ridden telecom company.

The government is open to taking this step to reassure shareholders and investors about their confidence in the loss-making telco.

On September 14, the stock gained a little over 10% after news agency Reuters said banks led by State Bank Of India (NS: SBI ) had asked the government to go easy on Vodafone Idea, and it give the company time to repay its taxes and spectrum fees.

According to the company’s June 2021 earnings report, its gross debt was Rs 1.92 lakh crore, which included deferred spectrum payment of Rs 1.06 lakh crore and AGR dues of Rs 62,180 crore.

In June this year, Vodafone Idea’s then non-executive Chairman Kumar Mangalam Birla said that unless there is help from the government, the telecom’s "financial situation will drive its operations to an irretrievable point of collapse".

The ET report said that the government’s decision to pick up stake in Vodafone Idea is purely to allay investor concerns, and that it would not participate in management or running of operations.

Vodafone Idea closed at Rs 8.75 on September 14.

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  • Jitu Samanta @Jitu Samanta
    The Birlas are very manipulative.
    Like 0

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