Vodafone Idea nearing PSU stock status. What's in store for 60 lakh shareholders?
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After the Indian government decided to convert Vodafone Idea's upcoming spectrum dues repayment into equity, in line with the provisions in 2021 telecom relief measures, the debt-ridden telco is now nearing PSU stock status as the government's holding would increase from 22.6% currently to 49%. "With GoI’s stake rising to 49% after the latest equity conversion, any further equity conversion of dues could lead to GoI’s stake crossing 50%, which could turn Vi into a public sector unit (PSU)," Motilal Oswal analyst Aditya Bansal said. The conversion, which will occur at Rs 10 per share, is at a 47% premium to the stock's last closing price. As a result, Vi shares hit the 10% upper circuit this morning to Rs 7.49 on BSE. Vi’s existing promoters will continue to have operational control, albeit with a modest 25.5% stake after the equity conversion. "Overall, we view this as a major display of support by the gov't...