Government has decided against reducing its stake in Vodafone Idea, aiming to maintain ownership in the telecom firm
Vodafone Idea won't witness any stake sale by the government in the telecom company. As per a report by the Times of India, the government plans to retain its 33 per cent stake in Vodafone Idea. With the telecom company's stock prices surging in recent months, it is on the verge of making a final decision regarding fundraising by February 27.
The government holds the largest stake in Vodafone Idea Limited at 33 per cent, followed by Kumar Mangalam Birla's Aditya Birla Group and UK-based Vodafone Plc. The government is of the opinion that the "time has yet not come to do full or partial divestment" of its stake, particularly as the funds raised by the company are earmarked for launching 5G services and reducing debt, as per the report.
The company is currently burdened with a debt of around Rs 2.2 lakh crore and is facing heavy losses. Despite this, its share prices have surged by more than 150 per cent in the last year. This increase aligns with the government picking up a stake in lieu of future interest outstanding it had to get.
As per sources cited in the report, the govt has no plans to sell off its shares in the company at present. They added that any call on this front will be taken "only at a later date". The government won't be divesting its stake until the telecom service provider devises a credible revival strategy.