2 weeks Ago
Vodafone-Idea News : Communications Minister Jyotiraditya Scindia has said that the government is not planning to increase its stake in Vodafone Idea (VIL) as it does not want it to become a public sector undertaking (PSU). In a strong message to Vodafone Idea, Scindia told PTI in an interview that it is now the telecom company's job to ensure its performance. After converting the recent spectrum auction dues of Rs 36,950 crore into equity, the government now holds a 48.
99 per cent stake in Vodafone Idea Ltd. Earlier, the government's stake was around 22.6 per cent.
It is pertinent to mention that any additional stake could turn the company into a state-owned entity, bringing it under the administrative control of the government, after which the government will have the right to appoint the board. Also, in such situations, the company comes under the purview of CAG and other oversight bodies. "It is now their (VIL's) job to ensure that they perform.
The government today has 49 per cent of the company. There is no intention for the government to make that into a PSU. So we will stick to 49 per cent," Scindia said.
On assessing the impact of the dues swap on VIL's health and future competitiveness, the minister said this question should be asked of VIL...
especially given the widespread suspicion that the telco will struggle to meet its payment obligations in the future as well...
and it is now their job to ensure their performance. Analysts say the government's shift from debt to equity for Vodafone Idea may ease short-term liquidity constraints for the telco, but structural challenges remain for the operator as factors such as stabilising customer base, tariff hikes, clearing long-pending debts and further relief in dues are critical for the telco's long-term survival. Also Read: J&K Bank Shares Slide Over 9% After Pahalgam Terror Attack, Ending 5-Day Rally On the issue of MTNL defaulting on bank loans, the minister said it has a substantial land bank and pointed out that it will be monetised to repay bank dues and loans.
"MTNL now has a large amount of asset base in terms of its land bank. We are progressing on that. And through NLMC - National Land Monetisation Committee - that land will be divested and through the proceeds of that land, all dues to banks and debt will be taken care of," Scindia assured.
However, he did not specify a timeline for such monetisation and said he was considering the matter. "NLMC is under DIPAM and the Finance Ministry. I am pursuing them.
As soon as that's done, that will be taken care of," the minister said. It is pertinent to mention here that state-run telecom firm MTNL has defaulted on bank loans worth Rs 8,346.24 crore from seven public sector banks, according to a statutory filing filed by the company over the weekend.
The loss-making state-run telecom firm said its total debt obligations had reached Rs 33,568 crore as of March 31, 2025, as per its April 19 filing. Vodafone-Idea loan The total loan defaults include Rs 3,633.42 crore raised from Union Bank of India, Rs 2,374.
49 crore raised from Indian Overseas Bank, Rs 1,077.34 crore raised from Bank of India, Rs 464.26 crore raised from Punjab National Bank, Rs 350.
05 crore from State Bank of India, Rs 266.30 crore from UCO Bank and Rs 180.3 crore including principal and interest payments.
The loan defaults occurred between August 2024 and February 2025. The company's total debt includes bank loans of Rs 8,346 crore, sovereign guarantee (SG) bonds of Rs 24,071 crore and a loan of Rs 1,151 crore from the Department of Telecommunications (DoT) for paying interest on SG bonds. Also Read: Stock Markets Rise For 7th Consecutive Session; Sensex Reclaims 80k, Nifty Settles Over 24,325 (With Inputs From PTI).
