Shares of Vodafone Idea witnessed strong buying on Tuesday, with the telecom stock rising as much as 20% intraday, in an otherwise weak broader market. Investors rushed to buy debt-laden telco shares as the government is set to more than double its stake in the company in lieu of outstanding spectrum auction dues.

The central government has decided to convert an additional ₹36,950 crore worth of the company’s spectrum dues into equity at ₹10 per share. With this, the centre will become the single-largest shareholder in the company with a 48.99% stake. Currently, it holds 22.6% shares in the company.

Snapping five sessions losing streak, Vodafone Idea share price jumped 20% to hit an intraday high of ₹8.15, while the market capitalisation climbed to ₹57,620 crore. Early today, the telecom major opened 10% higher at ₹7.49 against the Friday’s closing level of ₹6.81 on the BSE. In the past five sessions, the counter lost nearly 11%.

At the current level, Vi shares are up 23.5% from its 52-week low of ₹6.60 touched on November 22, 2024. The stock hit its 52-week high of ₹19.15 on June 28, 2024. The counter has lost 42% in the past one year and 20% in six months. In the calendar year 2025, the counter has gained over 1%, while it added nearly 9% in the past one month.

In an exchange filing on March 30, Vodafone Idea informed that the government of India has decided to convert the outstanding spectrum auction dues into equity shares. The total amount to be converted into equity shares is ₹36,950 crore at an issue price of ₹10 each. Post the issuance of equity shares, the government of India shareholding in the company will increase from existing 22.60% to 48.99%.

“The Ministry of Communications, Government of India has, in line with the September 2021 reforms and support package for telecom sector has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares to be issued to the Government of India under Section 62(4) of the Companies Act, 2013. This was communicated to the company via an order dated 29 March 2025, received by the company today, i.e. 30 March 2025,” it said in a BSE filing.

The company has been directed to issue 3,695 crore equity shares of the face value of ₹10 each at an issue price of ₹10 each within a period of 30 days after issuance of necessary order from relevant authorities including from Securities and Exchange Board of India,” the release noted.

The release further stated that pricing of shares to be allotted has been arrived basis the higher of the volume weighted price of equity shares during last 90 trading days preceding the relevant date or 10 days preceding the relevant date (the relevant date being 26 February 2025).

“The promoters will continue to have operational control of the company.  The Company will take all necessary actions to undertake the aforesaid issuance, upon receipt of the requisite approvals,” the release added.

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