Vodafone Idea shares will be acquired by the Government when the share price reaches Rs. 10 or more: Report

The government is expected to buy back a stake in telecom operator Vodafone Idea, after the company’s share price stabilizes at Rs. 10 or higher, after the telecommunications company offered to buy shares at that price was cleared by the Treasury in July. Operators in the country had previously been offered the ability to pay interest for four years of deferred spectrum installments as well as adjusted gross revenue (AGR) by converting the net present value of interest into equity.

According to a PTI report citing an official source, Department of Telecommunications will remove the share repurchase in Vodafone idea after the company’s stock stabilized at Rs. 10 or higher, in accordance with the Securities and Exchange Commission of India (SEBI) regulations require that redemptions take place at face value.

According to the report, the telecom operator has asked the government to buy shares at the aforementioned price, and the proposal was approved by the finance ministry in July.

Vodafone Idea has chosen to convert near Rs. 16,000 crore whuch interest debt is government debt. Following the acquisition, the telecom operator’s promoters are expected to have a 50% stake, down from nearly 75%, while the government will have a 33% stake.

However, according to the report, the government will only complete the acquisition of its shares in Vodafone Idea when the share price is at Rs. 10 or higher. On Thursday, the operator’s shares were trading at Rs. 9.68 – it hasn’t crossed the threshold required for an acquisition since April 19, according to the report.