Conversion of Vodafone Idea debt into equity an opportunity!

What does the Conversion of Vodafone Ideahint at?

Conversion of Vodafone Idea into equity could be an option to exit the crisis, lenders led by SBI have suggested to the DoT. In the conversion of Vodafone Idea according to Ravinder Takkar, MD and CEO of Vodafone Idea NSE 8.47 percent, the business had already opted for a 4-year moratorium on AGR dues.

And the last date to take advantage of the one-time option of converting a portion of the equity debt was Tuesday.

Takkar stated that the telecom operator had a substantial amount of debt. And a stretched balance sheet and that converting debt to equity would consider as a positive move at any time.

According to the statement given by Takkar, conversion of debt into equity was necessary to reduce the company’s debt, particularly when giving most of the obligation to the Indian Government.

After conversion, the government will likely own roughly 35.8% of the total outstanding shares, while Vodafone Group will own 28.5%. And Aditya Birla Group will own 17.8% of the telecom operator.

Even after the conversion, Government would be the single largest investor in the company. The Government is not showing any desire to take up the company operations.

The duopoly or monopoly situation should avoid making the situation in the market stable & straight. On the other hand, Analysts are unimpressive. The decision on equity conversion demonstrates a lack of confidence in a major capital raise in the short term. And desirable improvement in cash flow in the medium term.

Let us know what are your thoughts regarding the conversion.

Do you think the telecom sector in India should revamp its policies?

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