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Motilal Oswal Report
The last few days have seen heightened investor interest in Vodafone Idea Ltd.'s equity conversion of the regulatory obligation for the next four years. How will this change the sector dynamics?
Vodafone Idea has agreed to convert the adjusted gross revenue and spectrum differed interest into equity as a part of government aid to the sector. The government had offered the option to convert the interest component accrued during the moratorium period into equity – the Net Present Value, as per Vodafone Idea, is expected to be ~Rs 160 billion. This implies that the government's stake in Vodafone Idea would be closer to 35%. It is important to highlight that Bharti Airtel Ltd. did not opt for a similar arrangement a couple of days ago.
So what will be the future repercussions?
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