Vodafone Idea will use the four-year moratorium allowed by the government but is unlikely to take the equity conversion option which is one of the key elements of the relief package announced by the Centre for telecom firms.

Last week, the Centre allowed telcos such as Voda Idea to defer past payments for a period of four years. However, they will have to pay a small interest during the moratorium period.

The government will have the option to convert the deferred due amount and also the annual interest on this deferred payment into equity at the end of the moratorium.

For Vodafone Idea, the package will come as a big relief as it reduces the payment burden by an estimated Rs 25,000 crore annually for four years.

However, brokerages such as ICICI Securities feel that in the worst case, Voda Idea could become majority owned by the government because of the equity conversion option.

Analysts said in such a case, the Centre could hold anywhere between 30 per cent and 70 per cent in Voda Idea.

It may be recalled that Aditya Birla group chairman Kumar Mangalam Birla had even offered to transfer his stake in Voda Idea to the government or any other entity that the Centre may consider worthy. This was, however, before the package was announced. With the relief, it has now dropped the idea.

Birla owns more than a 27 per cent stake in Vodafone Idea Limited (VIL), while British giant Vodafone Plc holds over 44 per cent.

Latest reports indicate that the promoters are not keen to take the equity conversion option, which could mean that they could look at bringing in strategic investors into the firm.

“With the relief package coming, the confidence of the company management in bringing strategic investors like a PE firm will go up,’’ an analyst with a domestic brokerage said.

A CNBC TV-18 report quoting sources said the company feels that the equity option “defeats the purpose of ownership” and that Voda Idea will strategise structural changes to put business back on track.

The firm also reportedly feels that a reduction in promoters stake would defeat the purpose of having competition in the telecom sector.

The Voda Idea stock on Monday ended nearly 4 per cent lower. On the BSE, it settled at Rs 10.75 — a drop of 3.76 per cent over the last close.

Analysts also feel that Voda Idea will have no other option but to hike tariffs and infuse capital as it has other liabilities that includes a Rs 60,000 crore NCD (non-convertible debenture) payment.

“It needs to get funding both in debt and equity for accelerating capex investment and meeting other liabilities, and without tariff hike, securing funding will be difficult. We see a possibility of 30-40 per cent tariff hike in the near future in popular 4G prepaid category and postpaid,’’ the ICICI Securities report said.