Vodafone Idea Shares Gain Over 19 Per Cent After Govt Increases Stake In Telecom Company

Vodafone Idea Share Price: Vodafone Idea share price witnessed a significant surge on April 1 on the NSE. The stock gained following an announcement by Vodafone Idea, which stated that the government is set to convert a portion of the company’s dues into equity shares.

Vi Share Price

Shares of Vodafone Idea surged over 19 per cent to hit an intraday high of Rs 8.12 apiece on the NSE. On March 30, Vodafone Idea informed the exchanges that the Ministry of Communications would convert the outstanding spectrum auction dues, including deferred dues repayable after the expiry of the moratorium period, into equity shares. These equity shares will be issued to the government of India. The company added that the share conversion is a part of the ministry’s ‘Reforms and Support Package’ for the telecom sector.

“Pursuant to Regulation 30 of the SEBI Listing Regulations, it is hereby informed that the Ministry of Communications, Government of India has, in line with the September 2021 Reforms and Support Package for Telecom Sector decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares to be issued to the Government of India under Section 62(4) of the Companies Act, 2013,” the company said.

Vodafone Idea added that nearly Rs. 36,950 crore in dues will be converted into shares. The company will issue as many as 3,695 crore equity shares with a face value of Rs. 10 per share within a period of 30 days after the issuance of the necessary order.

The telecom company added that the pricing of shares which will be allotted to the government has been calculated on the basis of the volume-weighted price(VWAP) of the shares during the last 90 trading days preceding the relevant date or 10 days preceding the relevant date. The relevant date in this case is February 26.

Vodafone Idea Government Stake

Following the issue of shares by Vodafone Idea, the Government of India’s stake will increase by 22.6 per cent to nearly 48.99 per cent. Despite the increased stake, the promoters will continue to have operational control of the telecom company.

Indus Towers Share Price

Shares of Indus Towers Ltd also gained as the stock rallied nearly 8 per cent to hit an intraday high at Rs 360.9 apiece on the NSE. The stock gained as Indus Towers is a key infrastructure provider for telecom operators, including Vodafone Idea Limited (Vi). The company provides operators such as Vodafone Idea (Vi) tower rental and infrastructure sharing services via Master Service Agreements (MSAs). Vodafone Idea’s debt status can potentially impact Indus Towers’ financial performance.

Vodafone Idea Share Price History

In a year shares of Vodafone Idea have declined over 40 per cent on the NSE. On a year-to-date basis, the stock has climbed 0.25 per cent and in six months the telecom operator’s shares have fallen over 20 per cent. In a month Vodafone Idea's share price has risen over 4 per cent and in five days the stock has gained over 9 per cent.

At the time of writing shares of Vodafone Idea traded at Rs 8.05 apiece on the NSE up by 18.38 per cent on April 1.