Sebi Exempts Government from Open Offer in Vodafone Idea Deal

Securities and Exchange Board of India (Sebi) exempted the government from making an open offer to Vodafone Idea shareholders after acquiring 34% of the telecom operator. The move, spurred by converting spectrum dues into equity, aims to protect public interest and sustain VIL's customer service operations.

The Securities and Exchange Board of India (Sebi) has waived the government's obligation to make an open offer to Vodafone Idea Ltd's shareholders. This comes as the government plans to acquire a 34% stake in the telecom firm by converting spectrum dues into equity. Sebi's decision supports the objective of safeguarding public interest.

Sebi's Ashwani Bhatia emphasized that the government does not intend to alter the management or board of Vodafone Idea. The acquisition aims to maintain service continuity for the telecom's customer base and expand telecom infrastructure in India. Consequently, the government's stake will be classified as public shareholding.

Last month, the government decided to convert Rs 36,950 crore of Vodafone Idea's spectrum auction dues into equity under a telecom reforms package introduced in September 2021. While normally such a stake increase would trigger a mandatory open offer, Sebi acknowledged the potential financial strain on Vodafone Idea and granted an exemption.

(With inputs from agencies.)