Shares of the telecom company sharply pared gains and ended 12.71% higher at Rs 6.56 after clarifying that its board is currently not considering any investment proposal as reported by the media.
The stock surged as much as 34.88% to hit the day's high of Rs 7.85 in mid-morning trade amid media reports that the US tech giant Google was planning to buy a 5% stake in the company.
Vodafone Idea, however, clarified in mid-afternoon trade that it constantly evaluates various opportunities for enhancing the stakeholders' value. Currently, there is no proposal as reported by the media that is being considered at the board. Following the clarification, the stock sharply pared gains. It shed 16.43% from the day's high to end at Rs 6.56 on BSE.
Reacting to the media report, a foreign brokerage reportedly stated that such a deal would be a strategic positive for Vodafone Idea but have little impact on leverage. Capital raise could become easier if Google invests, it added.
The company's was hit hard in October 2019 after the Supreme Court of India had ruled in favor of the government on the AGR (adjusted gross revenue) issue, with grave revenue implications to the tune of over Rs 92,000 crore for the ailing telecom sector.
Consequent to the SC judgement, Vodafone Idea needed to pay over Rs 53,000 crore as license fee, spectrum usage charge, interest and penalty dues to the DoT.
On a consolidated basis, Vodafone Idea reported a net loss of Rs 5,807.24 crore in Q3 December 2019 as against a net loss of Rs 4,203.97 crore in Q3 December 2018. Net sales fell 5.75% to Rs 11,076.20 crore in Q3 December 2019 over Q3 December 2018.
Vodafone Idea operates as a telecom service provider. The company offers 2G, 3G, and 4G mobile services, as well as mobile payments, advanced enterprise offerings, and entertainment.
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