With debt-to-equity conversion routes now exhausted, the Indian government is considering alternative strategies to assist Vodafone Idea (Vi) amid its ongoing financial crisis. The aim: prevent a two-player dominance by Reliance Jio and Bharti Airtel in the country’s telecom sector.
Communications Minister Jyotiraditya Scindia has confirmed that there will be no further equity conversions of Vi’s adjusted gross revenue (AGR) dues. The government had already acquired a 49% stake in the company by converting ₹36,500 crore of spectrum debt. “We’ve already explored the equity route extensively. That window is now shut,” Scindia emphasized.
With limited tools left, officials are evaluating a potential deferment of dues due after the current moratorium ends in September 2025. However, any relief would likely be extended across the entire telecom sector to maintain fairness.
Experts believe that a two-year deferment of AGR dues could be the most viable solution. Vodafone Idea, burdened with total dues of ₹1.94 lakh crore as of March 31, 2025, remains the largest debtor in the sector. These dues span deferred spectrum obligations (up to FY44) and AGR liabilities (till FY31).
Last month, the Supreme Court rejected Vi’s plea for relief from ₹45,457 crore in AGR dues. However, it stated that it wouldn’t oppose government efforts to support the operator.
Inter-ministerial discussions are ongoing to find a middle ground that ensures the government doesn’t lose its dues while offering Vi time to restructure and stabilize. Officials acknowledge that the collapse of Vodafone Idea could mean the government loses a major chunk of its recoverable revenue.
Despite these challenges, the Centre is expected to remain a passive public investor. Over time, it might explore divesting its stake to sovereign wealth or strategic investment funds.
Vodafone Idea’s financial condition remains grim. The company reported a Q4 FY25 loss of ₹7,166 crore, up from ₹6,609 crore in the previous quarter. Its subscriber base dipped to 198.2 million by March 31, 2025.
On June 13, Vi’s stock closed down 1.77% at ₹6.67 on the BSE, reflecting persistent investor uncertainty.
