Shares of Vodafone Idea jumped over 23% to hit Monday's intraday high of ₹8.57.

What Happened: The debt-ridden company on Feb. 3 announced the government’s decision of converting the accrued interest from the deferment of the company's spectrum and adjusted gross revenue dues into equity. 

The government will convert the interest worth around ₹16,133 crore into about 1613 Crore equity shares at ₹10/share — much higher than the company's Friday closing price of ₹6.89.

This will make the Indian government the largest shareholder in the company with a 33% stake.

This comes as the company's promoters assured the government that they will ramp up fundraising efforts. 

Talking about the decision, Telecom Minister Ashwini Vaishnaw on Friday said, "We had sought a firm commitment that the Aditya Birla Group would run the company and bring necessary investments. Birlas have agreed and hence we have agreed to convert.”

He also reiterated the government's vision of having three-private players in the telecom sector to provide ample choices to the customers.

"We want India to be a three-player market plus BSNL and ensure healthy competition for consumers," the minister said.

Price Action: Vodafone Idea stock was trading 21.77% higher at ₹8.39 in the early hours of trading on Monday.

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