Vodafone Idea shares have shown continuous gains over the past four trading days. During this period, the stock price jumped nearly 15%, reaching ₹7.55. This rally comes amid the company’s new fundraising plans and news of potential government relief. According to a Bloomberg report, Vodafone Idea is in talks to raise around ₹25,000 crore (approximately $2.9 billion) in debt. The funds will be used to strengthen the telecom network and stay competitive against rivals like Reliance Jio and Bharti Airtel.
The report states that the company plans to take this loan from a consortium of domestic and foreign banks, potentially led by the State Bank of India (SBI). The loan tenure could be about 10 years. Vodafone Idea had previously halted its fundraising efforts due to weak financial health and significant government dues. However, with a rapidly declining customer base and prospects of government support, the company has revived its funding initiatives.
Hope for Government Relief, But No Official Confirmation Yet
Sentiment around Vodafone Idea shares has also been boosted by speculation that the government may provide relief on the company’s ₹84,000 crore outstanding dues, which include AGR (Adjusted Gross Revenue) liabilities. The report mentions that the government is considering extending the repayment period on the debt from 6 years to as long as 20 years. However, in a statement dated June 24, 2024, the company said it has not received any formal communication from the government regarding this.
New Investment and Technical Partnerships
In May, Vodafone Idea approved a proposal to raise ₹20,000 crore through a mix of equity and debt. Meanwhile, in April, the government converted spectrum payments into equity, increasing its stake in the company to 48.99%.
Recently, Vodafone Idea announced a partnership with U.S.-based AST SpaceMobile to launch direct-to-device (D2D) satellite connectivity in India. This initiative aims to improve network coverage in rural and remote areas.
Technical Breakout, But Risks Remain
Technical charts show a strong bullish pattern for Vodafone Idea shares, recording a “twin breakout,” which indicates the stock has surpassed two major resistance levels. According to this pattern, the share price could rise by about 13% from current levels.
Despite the bullish technical setup, the company continues to face financial challenges. In the recent March quarter, Vodafone Idea reported a net loss of ₹7,166 crore and remains heavily dependent on external funding to sustain operations. The stock is still trading significantly below its 52-week high of ₹19.15.
Disclaimer: This article is just for information. It should not be treated as investment advice in any way. Investing in the stock market is based on risk. Be sure to consult your financial advisor before investing in the stock market.
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