Vodafone Idea share price jumps 6% despite report of DoT demanding ₹6,000 crore bank guarantee
- Vodafone Idea stock price rallied despite media reports that the Department of Telecommunications (DoT) has sought a ₹6,000 crore bank guarantee from the beleaguered telecom operator.
Vodafone Idea share price jumped over 6% on Thursday, snapping a three-day losing streak. Vodafone Idea shares rallied as much as 6.89% to ₹8.99 apiece on the BSE.
The gains in Vodafone Idea stock comes despite media reports that the Department of Telecommunications (DoT) has sought a ₹6,000 crore bank guarantee from the beleaguered telecom operator.
The DoT has directed Vodafone Idea to provide a bank guarantee of ₹6,090 crore by March 10, according to a Moneycontrol report citing government sources.
This bank guarantee is intended to cover a one-time payment shortfall for spectrum acquired after 2015, the report added.
The government has offered the Aditya Birla Group telecom operator the alternative of making a cash payment of ₹5,493 crore instead of furnishing the full bank guarantee, the report said. However, the telecom operator must choose between the two options and comply with the DoT’s directive.
Capex Plan, Funding Optimism
Vodafone Idea share price surged after the company’s management announced it plans to invest ₹10,000 crore in network expansion by the end of March 2025. During its post-earnings conference call with analysts, Vodafone Idea CEO Akshaya Moondra said that the management expected the bank funding to conclude in the next 7–8 weeks.
He informed that the company had a closing cash balance of approximately ₹18,000 crore as of June 30, 2024, and it was sufficiently funded to execute the capex plans in the interim.
Additionally, the telco’s management remains optimistic about persuading the Indian government to convert the remaining dues into equity, reports said.
Vodafone Idea’s plea for a reassessment of its outstanding dues was rejected by the Supreme Court of India, and now the company faces a liability of ₹43,000 crore.
Moondra explained that ₹17,000 crore of this amount comprises deferred installments covered under the telecom reforms package and could potentially be converted into equity, while the remaining ₹26,000 crore consists of regular installment payments that would have been due even without the moratorium.
Vodafone Idea Q3 Results
Vodafone Idea reported its Q3 results on February 11. The telco’s consolidated net loss narrowed to ₹6,609.3 crore in the quarter ended December 2024, down from ₹7,175.9 crore in the September quarter.
Revenue from operations for Q3FY25 stood at ₹11,117.3 crore, reflecting a 1.7% growth from ₹10,932.2 crore in the previous quarter. Its Average Revenue Per User (ARPU) was up at ₹173 versus ₹166, quarter-on-quarter (QoQ).
EBITDA was up 3.6% at ₹4,712.4 crore versus ₹4,549.8 crore, while EBITDA margin improved to 42.4% from 41.6%, QoQ.
At 12:20 PM, Vodafone Idea shares were trading 5.71% higher at ₹8.89 apiece on the BSE.
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