Sign In
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.
New Delhi: Shares of VI (Vodafone Idea) jumped as high as 12.5 percent on Friday, September 5, to Rs 7.45 apiece on the Bombay Stock Exchange (BSE). The rally continued for three days after reports surfaced that the government is actively looking for a strategic investor to inject $1 billion into the cash-strapped and debt-laden telecom firm.
As per the Economic Times (ET), the Centre is looking for a strategic investor to buy 12-13 percent of the stake for over Rs. 8800 crore. Promoters Vodafone Group and Aditya Birla may dilute part of their holdings, while the government, which is the largest shareholder with a 48.99 percent stake, intends to remain invested. Both domestic and overseas investors are being approached, with expectations that a new partner will provide not only funds but also operational expertise.
The stock has gained over 14 percent in three sessions, nearly 15 percent in five days, and about 5 percent in the last month. However, the stock remains down 8 percent in the last six months and 10 percent year-to-date.
Additionally, the government is planning to give some relief to Vodafone Idea in its adjusted gross revenue (AGR) liabilities. The options that are currently being explored include extending the repayment schedule from six years to 20 years along with compound interest with simple interest. The further options that may come to rescue for VI (Vodafone Idea) are the imposition of a nominal annual charge until a long-term settlement is finalised. Officials indicated that some support is likely before the next installment falls due in March 2026.
Separately, the company is seeking approval to raise about Rs 7,000 crore by pledging its 315,000 km fiber network, previously valued up to Rs 11,500 crore. Officials stress that keeping Vodafone Idea afloat is vital to avoid a near-duopoly in India’s telecom sector.
The telecom operator’s total debt amounts to Rs 1.99 lakh crore, which includes a spectrum payment of Rs 2641 crore and AGR payments of Rs 16428 crore. The company's current cash reserves of just Rs 6,830 crore have heightened survival concerns of the firm.
