Vodafone Idea rallies for 6th day in a row, jumps 11%; here's why

As the sector continues to remain under unsustainable financial duress, Voda Idea is hoping that the government will provide the necessary support to address all structural issues faced by the sector

Shares of Vodafone Idea soared 11 per cent to Rs 8.04 on the BSE in intra-day trade on Tuesday amid heavy volumes in an otherwise subdued market. At 10:40 am, the stock of the telecom services operator was up 8 per cent, as compared to a 0.29 per cent decline in the S&P BSE Sensex. A combined 491 million equity shares had changed hands on the counter in the first one-and-half hour of trading on the NSE and BSE.

In the past six trading days, Vodafone Idea has gained 34 per cent as the telecom company said it is hopeful that the government will provide the necessary support to address all structural issues faced by the sector.

The stock had hit a 52-week low of Rs 4.55 on August 8, 2021, after the Supreme Court vide its order dated July 23, 2021, rejected the modification application filed by the company and other operators, requesting to allow the Department of Telecommunications (DoT) to correct manifest/clerical/arithmetic errors in the computation of Adjusted Gross Revenue (AGR) demands. Subsequently, on August 10, 2021, the company filed a review petition against the order dated July 23, 2021, which is pending outcome.

“Your company is disappointed by the verdict and will take further legal recourse as appropriate. Your company believes the government recognizes the criticality of the sector and the importance of retaining healthy competition amongst private sector operators. Your company’s robust wireless digital infrastructure covering 1.2 billion population for mobile telecommunication services has played a key role in nation-building and is critical for the country’s Digital India Mission,” Vodafone Idea had said in the financial year 2020-21 (FY21) annual report on the outlook of the company.

As the industry continues to remain under unsustainable financial duress, the company is hopeful that the government will provide the necessary support to address all structural issues faced by the sector. Therefore, while the company awaits the final government’s decision, it will continue to remain focused on providing quality service to the customers and sustain intensity in the market, Vodafone Idea said.

The company is focussing on the execution of its stated strategy. It has made significant 4G investments and continues to expand its coverage and capacity further. All the ongoing strategic initiatives will ensure that the company will continue to provide the best customer experience to retail and enterprise customers and help in creating an agile and future-fit organization, the release added.