Vodafone Idea on the Verge of Bankruptcy: Seeks Immediate Help from Government
India’s third-largest telecom company, Vodafone Idea, is now facing a major crisis. The company has clearly told the central government that without immediate support, it may not be able to continue operations beyond the financial year 2025-26. It warned that it may be forced to approach NCLT (National Company Law Tribunal) and start bankruptcy proceedings against itself.
Over ₹2 Lakh Crore in Debt
Vodafone Idea is buried under a debt of over ₹2 lakh crore. The company said that if the government does not step in now, its future will be finished. This won’t just affect Vodafone Idea, but also its 16 crore+ mobile customers, 59 lakh small shareholders, its vendors, and the entire telecom industry.
What Is the New Crisis?
Vodafone Idea has said it needs urgent financial support from the government to keep running. If this help doesn’t come, then even the equity stake that the government took in the company will become worthless. Also, the government may not be able to recover ₹1.18 lakh crore in pending spectrum dues.
The company said it has already raised ₹26,000 crore equity funding and gave the government a stake in the company in exchange for outstanding dues. But even after all this, banks are not ready to provide loans. The company said that government support is now necessary to unlock bank funding. Without this, operations cannot continue after FY 2025-26. (Also read: Mukesh Ambani’s Secret Dinner with Donald Trump)
NCLT May Be the Last Option
Vodafone Idea said that without help, it will not be able to pay its adjusted gross revenue (AGR) dues either. This might force the company to go to NCLT for insolvency, and the whole legal process can take a long time.
If Vodafone Idea ends up at NCLT, then its 16 crore mobile users will be affected. Also, there will be less competition in the telecom sector, giving customers fewer choices.
Impact on 59 Lakh Small Shareholders
The company also has 59 lakh small shareholders, who may face losses if Vodafone Idea goes bankrupt. These are people who have invested less than ₹2 lakh worth of shares. Foreign investors also hold about 6.5% stake, but no single foreign investor owns more than 1% of the company.
94% Value Lost in 10 Years
Many shareholders have been invested for years. In 2015, the share price was above ₹100, but now it’s only around ₹7.35. This means investors have lost around 94% of their value in the last 10 years. The current market value of the company is ₹80,000 crore.
Government Now Owns 49% Stake
Recently, Vodafone Idea converted some of its spectrum dues into equity, giving the government a 49% stake in the company. But even after this, the company still owes the government around ₹1.95 lakh crore in AGR and spectrum dues.
Appeal to Supreme Court
Meanwhile, Vodafone Idea has also filed a new petition in the Supreme Court, asking for waiver of over ₹30,000 crore in AGR penalty and interest. The company argued that since the government is now a partner, the earlier strict stand of the court on AGR should be reconsidered.
The company also said that the previous judgment is stopping the government from giving relief. Vodafone Idea has requested an urgent hearing, and the Supreme Court has listed the matter for May 19.
That date could be decisive for the future of Vodafone Idea—whether the company will survive or collapse.
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