Voda Idea slumps 19% as board approves conversion of govt dues into equity

Vodafone Idea said the equity shares will be issued to the Government at par value of Rs 10 per share, subject to final confirmation by the DoT.

Shares of Vodafone Idea slumped 19 per cent to Rs 12.05 on the BSE in Tuesday’s intraday trade after the company’s board approved conversion of adjusted gross revenue (AGR) and spectrum liabilities into equity.

With today’s fall, the stock of telecom services provider has corrected 28 per cent from its 52-week high level of Rs 16.79 touched on December 10, 2021. At 09:42 am; Vodafone Idea was down 17 per cent at Rs 12.30 on the BSE, as compared to 0.10 per cent decline in the S&P BSE Sensex. A combined around 470 million equity shares had changed hands at the counter on the NSE and BSE.

“The board of directors, at its meeting held on 10th January, 2022, has approved the conversion of the full amount of interest related to spectrum auction installments and AGR dues into equity. The Net Present Value (NPV) of this interest is expected to be about Rs 16,000 crore as per the company’s best estimates, subject to confirmation by the Department of Telecommunications (DoT),” Vodafone Idea said in an exchange filing.

Since the average price of the company’s shares at the relevant date of 14.08.2021 was below par value, the equity shares will be issued to the Government at par value of Rs 10 per share, subject to final confirmation by the DoT. The conversion will therefore result in dilution to all the existing shareholders of the company, including the Promoters, the company said.

Vodafone Idea further said, following conversion, it is expected that the Government will hold around 35.8 per cent of the total outstanding shares of the company, and that the Promoter shareholders would be around 28.5 per cent (Vodafone Group) and around 17.8 per cent (Aditya Birla Group), respectively. CLICK HERE FOR FULL REPORT