Tue Apr 01 04:30:00 UTC 2025: ## Vodafone Idea Soars 15% After Government Converts Debt to Equity

**MUMBAI, April 1, 2025** – Shares of beleaguered telecom operator Vodafone Idea (VI) surged 15 percent on Monday after the Indian government announced it would convert the company’s outstanding spectrum dues into equity shares. This move saw VI issue 3,695 crore equity shares at Rs 10 per share, effectively converting Rs 36,950 crore of debt into stock. The government’s stake in VI will increase from 22.6 percent to 48.99 percent as a result.

The government’s decision, approved on March 29th and implemented in line with the 2021 Telecom Reforms Package, marks the second such debt-to-equity conversion for VI. In 2023, Rs 16,133 crore of debt was similarly converted. This latest conversion provided immediate relief, with VI shares trading at Rs 7.8 on the NSE by midday, up 15 percent. Indus Towers, a related company, also saw a 6.9 percent increase in its share price.

International brokerage Citi Research maintained its “buy” rating on VI, setting a target price of Rs 12 per share, representing a potential 76 percent upside. However, Citi cautioned that VI still faces challenges in raising funds for 4G and 5G network expansion. Domestic brokerage Motilal Oswal also expressed a positive outlook, raising its target price to Rs 6.5 per share but noting that the company’s long-term success hinges on subscriber base stabilization and further debt relief. Motilal Oswal highlighted the positive impact on Indus Towers as well.

Despite the positive market reaction, VI shares have lost over 50 percent of their value in the past year, reflecting investor concerns about the company’s ongoing financial struggles. The company remains a high-risk, high-reward investment.

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