MUMBAI : Shares of Vodafone Idea Ltd gained as much as 30% on Friday on reports that Google Inc. is considering picking about 5% stake in Vodafone Idea Ltd.
At 10:52 am, Vodafone Idea was at ₹7.56 per share, up 29.9%, even as the benchmark Sensex lost 0.24% to 32,122.81 points.
The telecom joint venture of Vodafone Group Plc and the Aditya Birla Group is also in talks with private equity firms for potential investments, according to reports.
As per the average price of the Vodafone Idea stock in the past two weeks, a 5% stake sale could fetch the company around $101.5 million. The stock has lost more than 57% in the past 12 months. An eventual deal could happen at a significant premium to the recent stock price.
Google’s interest in Vodafone Idea comes at a time of financial stress on the Mumbai-based company amid cheap mobile tariffs and strong competition that intensified with the entry of Reliance Jio Infocomm Ltd in September 2016.
Vodafone Idea owes the Indian government ₹53,000 crore in adjusted gross revenue dues. It posted losses of ₹6,453 crore in the December quarter. Revenue in the period rose 2.26% to ₹11,089.4 crore, thanks to 4G customer additions and improvement in average revenue per user. Ebitda, or earnings before interest, taxes, depreciation and amortization, increased marginally to ₹3,420.5 crore, while Ebitda margin fell 47 basis points to 30.84%. Vodafone Idea has not announced its March quarter earnings yet.
Vodafone Plc and Aditya Birla Group own 44.39% and 27.18% stake, respectively, in Vodafone Idea, and have valued their stake in the company at zero. Both partners have also frozen any fresh investment into the firm in view of its huge losses and liabilities.