Shares of Vodafone Idea went up sharply in Monday's trade after the government agreed to convert the telecom operator's interest dues into equity. In an exchange filing, Vodafone Idea said that the Centre directed it to issue shares worth Rs 16,133. 10 crore at an issue price of Rs 10 per share.
The stock went 24.38 per cent to hit a day high of Rs 8.57 over a previous close of Rs 6.89. Around 7.70 crore shares on the BSE changed hands today, which was more than double compared to Voda Idea's two-week average volume of 3.32 crore shares. Turnover on the counter was at Rs 57.29, with a market capitalisation m-cap of Rs 26,530. 17 crore. Today there were 2,24, 53,128 buy orders against nil sell orders.
The stock was last seen higher than 5 day, 20 and 50 day moving averages but lower than 100 day and 200 day moving averages. The RSI, the counter's 14 day relative strength index, came at 63.90. A level below 30 is considered oversold, while a value above 70 is considered overbought. The company's stock has a negative price-to- equity P E ratio of 0.78.
Voda Idea has an average target price of 7.60, according to Trendlyne data, suggesting a potential downside of 7.32 per cent. The scrip has a one-year beta of 1.25, indicating high volatility.
In 2022, the telecom department computed the net present value NPV on the interest on spectrum and adjusted gross revenue AGR on deferred statutory dues at Rs 16,133. 1 crore. The telco has been owed to the government for use of airwaves, including interest related to payments for spectrum.
In October of last year, market regulators approved the conversion of Voda Idea dues into equity. The relief for the company comes as part of the reforms package announced by the Centre in September 2021.
In 2021, the government approved a rescue package for debt-strapped telecom companies, allowing them to convert interest on deferred adjusted gross revenue owed to the government into equity. The Supreme Court gave telecom firms 10 years until 2031 to clear the dues in 2020.
The telecom sector was disrupted after the entry of Mukesh Ambani's Reliance Jio and the sector's troubles had been compounded by large dues owed to the government.
As of September last year, the company's total gross debt, excluding lease liabilities and including interest accrued but not due, stood at Rs 2,20, 320 crore.
Voda Idea had previously said that the Centre would have a 33 per cent stake in the company with the conversion of dues into equity. Indian equity benchmarks fell in early trade, dragged down by automobile, metals and technology stocks.