Vodafone Idea Unlikely To Convert Interest On Govt Dues To Equity: IIFL

(Vi) is unlikely to opt for conversion of interest on government dues into equity, brokerage 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 likely to continue its fund-raising efforts from its promoters and other investors rather than letting the government acquire a significant stake, “ said.

Last Friday, Bharti Airtel announced that it will pay the interest on deferred spectrum and adjusted gross revenue liabilities and will not issue equity to the government.

The company informed the department of telecommunications that it will not avail the option of conversion of the interest on deferred spectrum and AGR dues into equity, it said in a stock exchange notification on Friday.

The government last October announced a slew of measures to protect the financial health of telecom This includes a four year moratorium on the spectrum and AGR dues. Further the also have an option to convert the interest amount arising due to the said deferment into equity.

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

RECENT NEWS

Central Banks And The Economic Horizon: Steering Through Uncertaintie

In the evolving landscape of global financial markets, the strategic role of central banks has come under intense scruti... Read more

Transforming Financial Operations With Robotic Process Automation

Author: Ricardo Goulart                           ... Read more

The Role Of Machine Learning In Fraud Detection

        Author: Gerardine Lucero                  &nbsp... Read more

Principles Of Islamic Banking And Finance

When it comes to banking, a significant new contender has entered the ring. The principles of Islamic banking and financ... Read more

The Role Of Central Banks In Global Economy

The role of central banks in global economy is a stimulating topic that requires profound understanding. Commonly, centr... Read more

History Of Banking Evolution In The 21st Century

Throughout time, the banking sector has assumed a central role in the smooth functioning of economies, generating growth... Read more