Telecom Minister Ashwini Vaishnaw on Friday said that Vodafone Idea certainly needs capital either in the form of equity or debt to keep it running, indicating that the promoters will need to infuse funds.
In an exclusive interview with CNBC-TV18’s Shereen Bhan on the sidelines of the World Economic Forum in Davos, Vaishnaw stated, “Vodafone needs capital. And capital has to come either in the form of equity capital or debt capital. Conversion is a non-cash transaction and non-cash transactions are not going to bring capital.”
He said that the government is closely engaged with Vodafone Idea’s shareholders to ensure that enough capital is brought into the company and it survives.
“This is a very complex issue and I wouldn’t like to comment more than this but certainly we are engaged very closely with the current shareholders, and are making sure that enough capital is brought into the company so that it survives.”
In September 2021, the government had cleared the conversion of outstanding govt dues into equity for telecom companies. Government, however, remained firm on seeking further fund infusion by the promoter of the company stating that equity conversion will be considered post fund infusion by the promoters, but a commitment on the same has not come forth.
Vi promoter and Aditya Birla group Chairman Kumar Mangalam Birla met Minister Vaishnaw earlier this month and discussed the matter.
In addition to addressing the Vodafone issue, Vaishnaw also discussed the current state of India’s economy, specifically the investment climate. He stated that investors are confident about India’s growth story and are showing renewed interest in investing in the country. He attributes this increased confidence to Prime Minister Narendra Modi’s consistent economic policies and decisions.
Additionally, Vaishnaw highlighted that the government has been successful in attracting investment proposals worth Rs 5,000 crore, with a focus on the telecom and railway sectors. He believes that this is a great opportunity for international investors to look at India as a consistent growth story, with the potential for healthy and consistent growth of 6-8 percent over the next decade.
Further, he noted that India’s digitization efforts were highly praised at the Davos forum, with the country being seen as a talent and innovation destination. Vaishnaw also announced plans for a Vedanta-Foxconn plant, which is set to be operational within 14-16 months.
The Minister also discussed the need for balancing risks for both the private sector and government in the railway industry and announced plans to focus on risk allocation in the sector.
He also stated that India will become a railway exporting nation in the next 3 years and is looking at more sectors for the government’s Production-Linked Incentive (PLI) scheme. CNBCTV8