Vodafone Idea unlikely to convert interest on govt dues to equity: IIFL

Vodafone Idea (Vi) is unlikely to opt for conversion of interest on government dues into equity, brokerage IIFL said in a note today. The telecom company has to take a call on the issue by Wednesday.

“Our calculation suggests that if Vi were to exercise this option, there would be ~52 per cent dilution and the government could end up owning 34 per cent stake. With the recent ~20% tariff hikes and Vi having likely tied up the funding for repaying the non-convertible debentures maturing between December 2021 and February 2022, its prospects have improved. In our view, Vi is