SEBI Exempts Govt From Open Offer In Vodafone Idea Equity Deal

The Securities and Exchange Board of India has granted an exemption to the government from making an open offer following its proposed stake acquisition in Vodafone Idea Ltd., the regulator said in an order issued late Thursday.

The move comes after the government announced plans to convert the telecom operator’s outstanding spectrum dues into equity worth ₹369.50 billion.

As part of the transaction, the government will acquire 36.95 billion shares, increasing its stake in the company to 48.99% from 22.60%. The promoter group’s holding will fall to 25.57% from 38.80%, and public shareholding will decline to 25.44% from 38.60%.

The exemption was sought by the Department of Investment and Public Asset Management under the Ministry of Finance.

Under current rules, an entity acquiring more than 25% in a listed company must make an open offer to public shareholders. However, SEBI noted that the government’s intent is not to assume control of the company, and an open offer would impose an additional financial burden, undermining the objective of converting dues into equity.

The government also stated that such a requirement could negatively impact Vodafone Idea’s investors and the broader market.