Vodafone Idea shares jump 10%, hit 52 week high. Here's why?
Vodafone Idea shares jumped 10% to their 52-week high of Rs 12 on the NSE on Monday following 50% payment of their licence fees and spectrum usage charge (SUC) dues for the March quarter. The company has also assured the Department of Telecommunications (DoT) that 90% of the dues for the June quarter will be cleared in a staggered manner along with interest payment.
The price action witnessed strong volume action in the stock with over 35.76 crore shares changing hands on the NSE in the intraday trade around 12 pm.
Today's rally takes the gains over 40% in the past one month.
Quoting DoT officials, an Economic Times report today said that the department will not invoke the bank guarantees if the company sticks to its payment plans but the guarantees will be encashed if the telecom services provider fails to do so.
«They (Vi) have written to us that significant progress has been made with several groups of investors but nothing specific has been informed by the company,» an official privy to the details told ET on condition of anonymity.
«Once the promoters infuse the Rs 2,000 crore into the company, there may be some movement on external funding,» said a second official, who did not wish to be identified.
Although the government is the largest shareholder in Vi with a 33.1% stake, it does not interfere with the day-to-day affairs of the company. It has granted the company various extensions to make statutory payments as it has been paying interest on the delay.
The provisions for imposing penalties have been removed after the telecom reforms.
Over the past two years, the company has been struggling to raise funds, hurting its ability to expand 4G coverage and start a 5G rollout. The lack of funding is making it difficult
