Losers’ gambit: Vodafone Idea’s deal with the government

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Editor's note: It’s one blow after another for Kumar Mangalam Birla. Five years after the Aditya Birla Group chairman took the reins of what was then India’s largest telecoms company, he now appears close to losing the business. Vodafone Idea—Vi—announced yesterday that it will allot new shares to the government, making it the biggest stakeholder in the company with a 38.5% stake; Birla himself would be reduced to the smallest promoter, with 17.8%. Last August, he had stepped down as chairman of the company and relinquished his seat on the board as it increasingly looked like the company would go under.  With his stake dropping below the 26% threshold, Birla will not be left with much of a say in the management of the company. This led to an adverse reaction from the stock market. Vi’s shares fell sharply following the company’s statement on the allotment of equity to the government. They ended the day losing a little over 20% of their value as the prognosis became increasingly uncertain. Social media termed the government picking up a stake in Vi as “nationalization”. …