Is Government planning to merge vodafone with BSNL?

 The government must back state control of Vodafone Idea (Vi) by quickly merging it with Bharat Sanchar Nigam (BSNL) and recapitalise the ailing telco to save it from going bankrupt, especially after the Supreme Court ruled out any relief on its huge adjusted gross revenue (AGR) dues.

The only viable solution is for the government to recapitalise Vi by converting its debt into equity, preferably while merging it with BSNL, and then providing it a clear commercial mandate based on profitability targets and incentives.

If this happen, Vi’s shareholders would be heavily diluted as government debt is roughly six times the (telco’s) current market cap, and such a solution might be an acceptable outcome to shareholders, with a $20 billion enterprise value feasible and non-dilutive”. Shares of India’s only loss-making private telco, which reported a negative net worth of ₹38,228 crore at the end of March, closed 0.8% down at ₹8.29 on 29th July 2021 on the BSE, giving it a market cap of ₹23,821.64 crore.