Vodafone Idea (VI) shares surged sharply on Thursday to reach its highest value in over 2.5 years. The surge in VI’s stock price is a result of the recent developments aimed at rescuing the struggling telecom service provider.
On the National Stock Exchange (BSE), shares of the telecom company were trading 13.29 per cent higher at Rs 16.20 at 11 am. The shares of the company were trading at over 14 per cent on the Bombay Stock Exchange (BSE) at Rs 16.32.
WHY VODAFONE IDEA SHARES SURGED TODAY?
Vodafone Idea shares have performed well on the stock market over the past month, rising over 56 per cent.
However, the shares of the company have seen a sharp spike over the past 6-7 days following reports that the Department of Telecommunications (DOT) released the bank guarantees (BG) of the telecom firm along with peers Bharti Airtel and Reliance Jio. The bank guarantees were deposited by these telecom firms towards license fee and spectrum usage charges.
According to a PTI report, BGs of around Rs 2,500 crore have been released for Vodafone Idea. The move is part of the reform package announced by the government in September.
Another recent development that has further boosted Vodafone Idea’s stock price is the fact that the company has managed to raise funds and will repay interest owed to bondholders within the December 13 deadline. The development was confirmed by bankers to Business Standard.
Other developments that seem to have positively impacted Vodafone Idea’s stock price include the ongoing efforts by the management to boost the company’s revenue, including the recent tariff hike and possible fund infusion by promoters.
In addition, several reports indicated that the company has approached some banks for raising additional funds. Promoters are also looking for an external