To facilitate its potential exit from beleaguered telecom operator Vodafone Idea (Vi), the Government has asked the debt-ridden company to expand its search for an investor and look for both domestic and international options, The Indian Express has learnt.
Last month, this newspaper had reported that two big domestic corporate groups had evinced interest in this regard at different points in time. However, given that Vodafone Idea’s path to survival is seemingly murky due to its high-debt obligations, and it continues to lose subscribers to rivals Reliance Jio and Bharti Airtel, the search has been widened to also look for international investors, two top Government officials said.
It is also understood that a US-based fund with an Indian-origin founder is learnt to have evinced interest, and could join hands with a domestic partner having operational experience in the telecoms sector.
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Vodafone Idea and the Department of Telecommunications did not respond to queries from The Indian Express for comment.
Late last year, the Union Cabinet decided to freeze the debt-ridden telecom operator’s hefty adjusted gross revenue (AGR) dues of Rs 87,695 crore for the next five years, affording visibility over future liabilities, since it was a precondition put forth by the private sector.
The Government had acquired a 49 per cent stake in Vodafone Idea in February 2025 in lieu of the company’s interest dues. Beyond this equity, the new investor could eventually take majority control after the stake sale goes through, it is learnt. Besides the Government’s share, Vodafone Group held 16.07 per cent, Aditya Birla Group 9.5 per cent, institutional investors 11.6 per cent and non-institutional investors 13.83 per cent stake in the telco.
Explained | Why SC’s clarification on AGR dues is a big lifeline for Vodafone Idea
A senior official had earlier said the Government was concerned about the highly concentrated nature of India’s telecom sector and it would like to have multiple players in this “critical sector,” for which Vodafone Idea needs to be “a viable player”. But its precarious financial situation has raised concerns about its survival in the competitive marketplace.
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The freezing of the adjusted gross revenue dues of Rs 87,695 crore and a rescheduling of their repayment by the Cabinet came after the Supreme Court allowed the Government to reassess the telco’s statutory dues last year. An internal yardstick for the Government to exit would be that it would have to sell its stake at a profit. But no decision has been taken on the path to be taken for sale of government equity, the sources said.
The Cabinet’s relief package to the telecom operator allows it to reschedule the statutory dues payment over a 10-year period from FY32 to FY41. The AGR dues for FY18 and FY19 shall be payable by the telecom operator over the period FY26 to FY31 without any change.
Of the AGR dues that Vodafone Idea owes to the Government, annual payments of Rs 18,000 crore were supposed to start in March 2026. However, the company had approached the Supreme Court related to the AGR issue, and said if it was not able to secure relief from the payments, it would pose a big question mark over its financial stability and jeopardise the Government’s stake.
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The AGR dues frozen as on December 31 shall also be reassessed by the Department of Telecommunications (DoT). The outcome shall be decided by a committee appointed by the government and that shall be binding on both parties.
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In its petition in the Supreme Court, Vodafone Idea had contended that it needed the relaxation, failing which its planned investments will not happen and any hopes of an improvement in its operational performance would be dashed. Including penalties and interest, its total liabilities to the government are estimated at around Rs 2 lakh crore.
With such a heavy cash burden and declining revenues and subscriber base, the company may not have enough cash flows to pay the dues. Hence, the Cabinet decision is being seen as a big boost for the company, which has been struggling to raise money from the market as investors stay away due to its high AGR obligations.
This was the third lifeline the Government offered to the struggling company. As part of its 2021 relief package for the company, the Government had in February 2023 approved the conversion of Rs 16,133 crore of Vi’s interest dues into equity. In 2025, the Government had converted Rs 36,950 crore of spectrum dues into equity.
