Vodafone Idea Share Price: Why Vodafone Idea Shares Rise 16% Today?

Vodafone Idea Share Price: Shares of Vodafone Idea Ltd (VIL) surged by as much as 16 per cent in Tuesday's trading session, while Bharti Airtel Ltd also saw a 1 per cent rise, following the Cabinet's approval of a proposal to waive the bank guarantees (BG) telecom operators were required to provide for spectrum purchases up to 2022.

Vodafone Idea stands to benefit the most from this move, as it owes over Rs 24,700 crore to the government, with payments due between September 2024 and February 2025. Analysts suggest that VIL’s ability to raise funds could also depend on securing the BG waivers.

Burdened With Spectrum Fees, BG Dues

The telecom firm recently defaulted on its second bank guarantee (BG) payment of around Rs 350 crore, which was due on November 1 for spectrum acquired in a 2012 auction. This follows a previous missed payment of over Rs 4,600 crore for a BG related to a 2016 spectrum auction in September.

To remain competitive against Bharti Airtel and Jio, Vodafone Idea has raised Rs 24,000 crore through equity and is now working to secure an additional Rs 25,000 crore in loans, along with Rs 10,000 crore in bank guarantees or letters of credit. The funding is vital to support its capital expenditure plans and maintain its position in the market.

The share hit the intraday high of Rs 8.28 apiece, lower than half of its 52-week high of Rs 19.15 per share. As of 11:39 am, the shares of the company were trading 12.89 per cent or 0.90 points higher at Rs 7.88 apiece. 

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