Indus Towers report on equity conversion delay due to stock price ‘erroneous’, says Vodafone Idea

Vodafone Idea has said Indus Towers erroneously reported that the telecom operator’s government equity conversion is delayed due to the share price being below the par value of Rs 10.

“We wish to clarify there is no such guideline that prohibits the government from taking equity if the company’s current share value is less than the par value,” Vodafone Idea said in a statement late on Monday.

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Citing the company law provisions, the tower company said the equity conversion would only be decided once the stock price stabilises over Rs 10.

“This has been erroneously reported by Indus Towers. We have taken up the matter with Indus Towers for corrective action,” Vodafone Idea said.

In response to Vodafone Idea, Indus Towers has removed the paragraph ‘Govt stake in VIL’ from its September quarter report and filed a revised report with the stock exchanges. “The company is hereby correcting the aforesaid quarterly report by deleting the aforesaid paragraph titled ‘Govt stake in VIL’ which was incorporated erroneously,” it said in its revised quarterly report.

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As part of the government’s revival package for the telecom sector in September last year, Vodafone Idea had availed the option of deferring its spectrum payment and adjusted gross revenue dues for a period of four years. It also opted for the provision wherein the interest component of this deferral worth Rs 16,130 crore gets converted by the government into equity. Post the equity conversion, the government will become the single-largest shareholder in Vodafone Idea with a 33% stake.

The government’s stake conversion in Vodafone Idea is crucial for the company and its vendors like Indus Towers as that will give confidence to investors and lenders to infuse funds in the telco.

The Department of Telecommunications (DoT) recently asked the company to present its fundraising plan before conversion of dues into equity.