NEW DELHI: The Securities and Exchange Board of India (SEBI) is believed to have approved the government’s proposal to convert dues of over $1.92 billion into equity by telecom operator Vodafone Idea Limited (VIL) to equity.
According to reports, India’s capital market regulator has communicated this to the Department of Telecommunication (DoT). In January 2022, VIL opted to pay interest of nearly Rs 16,000 crore through preferential shares, which makes the government a 32% stakeholder in the company.
The government’s stake in Vodafone Idea after the conversion could be more than 30%, a government official said, which would make it one of the largest shareholders in the company, along with the UK’s Vodafone Group and Aditya Birla Group. SEBI is believed to have approved the government’s request to classify its shareholding in Vodafone Idea as a public float, the official added.
The market regulator’s guidelines state that only stakes up to 10% can be classified as public shareholding. The government will sell its stake in the telecom operator once it is turned around, the official said.VIL is also planning to raise funds via issuance of convertible debentures. The loss-making telco said it will put up this proposal in a next board meeting on October 21, 2022.