Vodafone Idea Soars 7% Following Bank Guarantee Waiver
After receiving a letter regarding waiver of bank guarantees from the Department of Telecommunications (DoT), shares of Vodafone Idea Ltd (VIL) surged by 7%. Vodafone Group also settled outstanding dues to the tune of ₹11,650 crore, which was secured against its stake in the domestic telecom operator.
After receiving a letter regarding waiver of bank guarantees from the Department of Telecommunications (DoT), shares of Vodafone Idea Ltd (VIL) were up by 7%. Vodafone Group also settled outstanding dues to the tune of ₹11,650 crore, which was secured against its stake in the domestic telecom operator.
Shares of Vodafone Idea soared by 7.09% to hit at ₹8 on BSE. As per an exchange filing, the company said, “We wish to inform you that DoT vide its communication dated 27 December 2024, has dispensed with the requirement of submission of Financial Bank Guarantees for the Spectrum acquired in Spectrum Auction held in 2012, 2014, 2015, 2016 and 2021, subject to certain terms and conditions.”
Prior to the recent reform, VIL was mandated to provide bank guarantees worth ₹24,800 crore for each spectrum installment, which is 13 months before the installment due date for the auction. VIL said that bank guarantees have been waived off for the 2012, 2014, 2016, and 2021 auctions out of the five auctions.
However, the company said that there would be a one-time partial shortfall for the 2015 auction, in which Net Present Value (NPV) of all payments will be less than pro-rated value of the used spectrum. VIL is currently in discussions with the Department of Telecommunications (DoT) to finalise the amount of this partial shortfall.
Recently, Geojit Financial Services reduced the target price to ₹8.60 apiece from ₹17 in August. The new target price hints a potential upside of 10% from Tuesday's closing price of ₹7.80.
Shares of Vodafone Idea Ltd are currently trading at ₹7.81 apiece.
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