The Vodafone Idea board has approved availing of 4-year moratorium of the adjusted gross revenues (AGR) and the spectrum installment dues but more importantly equity shares will be issued to the government at Rs 10 per share after the confirmation of the Department of Telecom (DoT). Conversion to equity will result in a dilution to all shareholders including promoters and post the conversion, the government will hold around 36 percent stake. This was on the expected lines, said Nitin Soni, Senior Director, Corporates at Fitch Ratings in an interview with CNBC-TV18.

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Govt to hold 35.8% in Vodafone Idea after conversion of AGR dues into equity

He expects business as usual for Vi and this will provide some cashflow relief to the company to spend more on 4G expansion. However, he believes Vi is still in a very precarious situation because even after the tariff hikes, it is still not investing enough on the capex side. He doesn’t see any new investors putting big amount of money into the company in the short-term.

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