Shares of Vodafone Idea soared 12 per cent to ₹8.18 on the BSE in Tuesday’s intra-day trade amid heavy volumes. The up move in stock price of telecom services provider came after the company in an exchange disclosure informed that the Government of India (GoI) raised its stake in Vodafone Idea to 48.99 per cent from 22.60 per cent. The GoI has increased its stake in Vodafone Idea through the President of India (acting through and represented by the Department of Investment and Public Asset Management, Ministry of Finance, Government of India).
At 02:52 PM: Vodafone Idea was quoting 9.5 per cent higher at ₹8.01, as compared to 1.2 per cent rise in the BSE Sensex. The average trading volumes at the counter more than doubled. A combined 997 million equity shares changed hands on the NSE and BSE.
On March 30, 2025, the government agreed to raise stake in Vodafone Idea to 48.99 per cent with fresh acquisition of shares worth ₹36,950 crore in lieu of outstanding spectrum auction dues. The stock price of Vodafone Idea had hit a high of ₹8.57 on April 1, in intra-day trade.
The Capital Raising Committee of board of directors of Vodafone Idea has, at its meeting held on April 8, 2025, issued and allotted 36,950 million equity shares of face value of ₹10 each at an issue price of ₹10 per equity share aggregating to ₹36,950 crore to the Department of Investment and Public Asset Management, Government of India (acting through President of India).
The government’s decision to convert ₹36,950 crore dues of Vodafone Idea into equity is a “major” and “timely” display of support that will offer significant cash flow relief to the telco in the next three years and help it complete long-delayed bank debt raise, the brokerage firm Citi said on March 31.
After the conversion of the spectrum liabilities into equity, Vodafone Idea is expected to raise bank debt which will help it undertake capex to strengthen its 4G network and rollout the 5G network. This, in turn, will curtail the subscriber churn, which along with expectations of tariff hikes in the future, will raise the average revenue per user (ARPU) levels and, thus, improve the OPBDITA generation. However, the AGR dues remain large and ICRA expects the GoI to consider providing additional reprieve to Vodafone Idea in some form, the contours of which would evolve.
While Vodafone Idea’s ARPU remains the lowest among the private operators, it has been increasing, rising to ₹163 in Q3FY25 from ₹145 in Q3 FY24 following the tariff hikes undertaken by all the telcos in July 2024. The Indian telecom sector is likely to witness another round of tariff hike in FY26, which, along with an expansion of the subscriber base on the back of network improvement undertaken by Vodafone Idea, is expected to boost the profit generation.
Vodafone Idea plans to increase its 4G coverage in 17 priority circles. The company continues to engage with lenders for tie-up of bank debt. A timely tie-up of the debt and implementation of the proposed capex without delay will be crucial for the company to improve its network and improve the cash flow, the rating agency said. The Stable outlook reflects ICRA’s expectation of adequate Government support for the repayment of AGR dues, besides the profit growth from the possibility of a tariff hike, going forward.
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