Finance Ministry has cleared a proposal to convert Vodafone Idea‘s accrued interest on dues worth Rs 16,130 crore into equity. The telecom department will likely finalise the transaction according to the package announced earlier.

Officials reported that the equity conversion had received the finance ministry’s nod in line with the approved (telecom relief) package. It is to be noted that the equity conversion, which was subject to government approval, has been pending since January this year.

The decision is vital for Vodafone Idea to conclude its long-pending Rs 10,000 crore external fundraising via equity as potential investors want clarity on this issue. The carrier is also in talks with banks for another Rs 10,000 crore in debt since it needs to roll out 5G to effectively compete with rivals Reliance Jio and Bharti Airtel and stem subscriber losses.

Headquartered in Mumbai, Vodafone Idea Limited is a pan-India integrated GSM operator offering 2G, 3G, 4G, VoLTE, and VoWiFi (Voice over Wi-Fi) services. As of 2021, the company has a subscriber base of nearly 258.45 million, making it the third largest mobile telecommunications network in India.
On 31 August 2018, Vodafone India and Idea Cellular merged to form a new entity named Vodafone Idea Limited. Currently, it holds a 28.5% stake in the combined entity, and Aditya Birla Group holds a 17.80% stake.