Vodafone Idea shares jump 7% after relief on spectrum bank guarantees

Shares of Vodafone Idea surged 7 per cent at Rs 8 a piece on the BSE in Monday’s intraday trade. Vodafone Idea share price rose after the debt-laden telecom provider Vodafone Idea Ltd. announced that the Department of Telecommunications (DoT) has waived the requirement to submit financial bank guarantees for spectrum acquired in auctions held in 2012, 2014, 2015, 2016, and 2021. The company received this communication from the DoT on December 27, 2024. However, this waiver comes with specific terms and conditions.  

 

Previously, Vodafone Idea was required to provide bank guarantees amounting to approximately Rs 24,800 crore against each spectrum installment, 13 months before the due date. Following the DoT's decision, Vodafone Idea confirmed in its filing that no bank guarantees would be required for the 2012, 2014, 2016, and 2021 auctions.  

 

 

For the 2015 auction, a one-time partial shortfall remains, and Vodafone Idea is in discussions with the DoT to finalise the amount. "This move to waive bank guarantees underscores the government’s ongoing support for the telecom sector and enables telecom operators to redirect banking resources toward expanding 4G and 5G networks in India," the company said in an exchange filing on Saturday. 

 

In a prior clarification on November 26, Vodafone Idea responded to reports about the Union Cabinet's approval of a proposal to remove bank guarantee requirements for spectrum purchased in auctions up to 2022. At that time, the company had not received formal communication but acknowledged making detailed representations to the DoT, aligning with an industry-wide demand for such relief.  

Vodafone Idea share price history

Vodafone Idea stock has underperformed the market in the last six months as it has fallen 57 per cent, while slipping 52 per cent in the last one year. In comparison BSE Sensex has fallen 0.56 per cent in the last six months and 8.8 per cent in a year.

 

The company has a total market capitalisation of Rs 53,459.76 crore. Its shares are trading at a price to earnings multiple of 333.69 times at an earning per share of Rs 1.97. 

 

At 09:29 AM, the stock price of the company advanced by 2.68 per cent at Rs 7.67 a piece on the BSE. By comparison, the BSE’s Sensex was up 0.16 per cent to 78,573.09 level.