Ericsson Sells ₹428 Cr Vodafone Idea Stake in Bulk Deal: What It Signals for Vi’s Financial Future

 

In a significant offloading move on the Indian bourses, Ericsson India Pvt Ltd has sold its entire stake in Vodafone Idea (Vi), valued at ₹428.43 crore, via a bulk deal on the National Stock Exchange (NSE). This divestment marks a critical point in the ongoing struggle of the embattled telecom operator and signals the growing caution among its vendor-creditor stakeholders.

 Deal Snapshot

• Seller: Ericsson India Pvt Ltd

• Volume: ~63.37 crore equity shares

• Price per share: ₹6.76

• Total deal value: ₹428.43 crore

• Percentage stake sold: ~0.6% of Vodafone Idea’s equity

While the buyer of the stake is currently undisclosed, market buzz suggests the shares may have been picked up by institutional investors or high-risk appetite hedge funds, potentially eyeing a speculative gain if Vi executes a successful turnaround.

From Dues to Dilution: How Ericsson Became a Shareholder

Earlier this year, Vodafone Idea issued equity shares to Ericsson and Nokia in lieu of long-standing unpaid dues, converting liabilities into ownership under a debt-to-equity swap deal.

• Ericsson's dues settled: ₹938 crore

• Allotment price: ₹14.80 per share

• Current sale price: ₹6.76 per share

• Unrealized loss for Ericsson: ~54% on paper

This haircut on value illustrates the steep erosion in investor confidence and the turbulent ride for Vi's stock since the allotment.

---

🧾 Nokia Took the Exit First

Ericsson follows in the footsteps of Nokia Solutions and Networks India, which offloaded its entire 0.95% stake (worth ₹785.67 crore) in April 2025 at ₹7.65 per share. Nokia too had received equity via dues settlement worth ₹1,520 crore.

The message is clear: key global telecom vendors are choosing to liquidate their stakes early—even at a loss—rather than bet on Vi’s prolonged turnaround story.

 Vodafone Idea: Caught in a Financial Storm

Vodafone Idea has been plagued by mounting debts, massive spectrum dues, and stagnant operational metrics:

• Subscriber base: Shrinking in comparison to Jio and Airtel

• ARPU (Q4 FY25): Among the lowest in the industry

• Capex & 5G: Limited due to funding gaps

• AGR dues: Over ₹58,000 crore still pending

Despite a government-led telecom relief package, the path to financial sustainability remains steep. Fundraising attempts have been sporadic, and its ability to scale up 5G rollout or network expansion continues to be restricted.

 Industry Takeaways

1. Vendor Disengagement:
   The exit of strategic creditors like Ericsson and Nokia reflects a broader sentiment of reduced long-term commitment from Vi's global partners.

2. Loss Recognition:
   These vendors are realizing partial recovery rather than holding out for full payment through potentially volatile equity.

3. Liquidity Prioritization:
   The deals also highlight a return to liquidity, where stakeholders prefer cash now over an uncertain future upside.

4. Market Sentiment:
   Large volume stake sales, especially at a discount, tend to trigger bearish sentiment and could suppress the stock price in the near term.

 What's Next for Vodafone Idea?

The company still hopes to raise capital from private investors, with earlier talks of promoter infusion and strategic partnerships. However, continued exits and depressed valuations may complicate negotiations with potential investors.

Key focus areas for Vi going forward:

• Network improvement to stem subscriber churn

• ARPU growth strategies, possibly through tariff hikes

• Aggressive funding for 5G infrastructure

• Cost optimization and liability management

 Expert Quote

“Vendors liquidating equity stakes is not unexpected. Given Vi’s financial position, Ericsson’s move appears more pragmatic than pessimistic,” said a senior telecom analyst. “The stock may see short-term pressure, but for Vi, execution is now everything.”

 Conclusion

Ericsson’s exit from Vodafone Idea underscores a harsh reality: debt-for-equity may offer temporary relief, but only sustained operational performance and reliable funding can restore faith in the company. With key vendors cashing out, the ball is now firmly in Vodafone Idea’s court to deliver on its turnaround promises.