Vodafone Idea to amend shareholders' pact to retain promoter control despite government's 49% stake
Debt-laden Vodafone Idea Ltd (Vi) said on Friday that its board has approved changes to the shareholders' agreement to allow promoters —
Aditya Birla Group
and
Vodafone Group
— to retain governance and management rights, even as the Indian government's stake in the company has risen to 48.99%.
The proposed amendment, approved during a board meeting on May 2, seeks to revise the "Qualifying Threshold" from 13% to 10% and, crucially, to exclude the government's equity from this calculation for governance purposes, news agency PTI reported.
"The Board of Directors at its meeting held today i.e. on 2 May 2025 have inter-alia resolved to... amend certain clauses of the Shareholders' Agreement... so as to modify, amongst others, the 'Qualifying Threshold' from 13 per cent to 10 per cent and, solely for this purpose, to disregard the equity shares originally issued to the Government of India," Vodafone Idea said in a regulatory filing.
The company will seek shareholder approval for these amendments at an Extraordinary General Meeting (EGM) scheduled for June 3.
Following the government's approval to convert dues worth Rs 36,950 crore into equity, its shareholding rose from 22.6% to 48.99%. Meanwhile, Aditya Birla Group and Vodafone Group now hold 9.5% and 16.07% respectively.
Under the existing shareholder agreement, promoters retained governance rights as long as they collectively held at least 13% of equity.
The revised pact aims to ensure that promoters can continue appointing directors and key executives, even after dilution of their stake.
Vi's total debt rose to Rs 2.17 lakh crore in the December 2024 quarter, compared to Rs 2.03 lakh crore a year earlier. Of this, Rs 2.14 lakh crore is owed to the government, and Rs 2,300 crore to banks and financial institutions.
This restructuring move is seen as a critical step in maintaining operational continuity and strategic direction under promoter leadership despite the government emerging as the single largest shareholder.
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