New Delhi: Shares of Vodafone Idea (VIL) jumped 9% to a new 52-week high on Monday, according to reports that the Department of Telecom (DoT) has released bank guarantees deposited by the beleaguered telecom company, along with peers Bharti Airtel and Reliance Jio, for licence fee and spectrum usage charges.
VIL has secured a bank guarantee (BG) for Rs 2,500 crore, according to a report by PTI. Airtel received BGs of Rs 4,000 crore while Reliance Jio received BGs worth Rs 2,700 crore last month, according to the PTI report. The move was announced in September as part of the government’s reform package.
Following the news, Vodafone Idea’s stock jumped more than 9% to Rs 15.78 on Monday, marking the company’s highest level in the last 31 months. It had given up part of its gains by 11:55 a.m. and was trading at Rs 15.5.
The BSE barometer and benchmark Sensex was trading at 57,312.41, down 384.05 points or 0.67 percent, at the time of writing.
Vodafone Idea’s stock has rewarded investors handsomely. In the previous four months, the stock has surged roughly 250 percent from its 52-week lows in August. Meanwhile, after the firm announced a 20-25 percent increase in its prepaid rate starting November 25, 2021, the stock has increased 45 percent in just six days.
VIL announced a 20-25% rise in its prepaid tariff plans across the board on November 23, as well as a 25% increase in the standard entry-level voice plan. According to the corporation, the new measures would help alleviate the industry’s financial hardship by starting the process of improving average revenue per unit (ARPU).
VIL’s parent company, Vodafone Group, has submitted an application with the government to settle a Rs 20,000-crore retrospective tax dispute, according to an ET article.