After 17% fall on LS poll outcome day, Voda Idea up 12% today; here's why

Vodafone Idea (Vi) saw a sharp recovery in its stock price on Wednesday from the lows seen on the result day of the Lok Sabha elections, June 04, 2024. 

Shares of Vodafone Idea soared up to 12.55 per cent at Rs 14.89 per share on the BSE in Wednesday’s intraday trade. The stock recovered after falling over 17 per cent on Tuesday. 

The stocks rebounded after the ruling Bharatiya Janata Party (BJP) looked firm in securing support from its allies to form a coalition government. The NDA tally predicted to cross 350-400 seats by pollsters fell below 300 at 292 seats out of a total 543 seats. While the opposition party INDIA alliance secured 234 seats causing heavy selling in the Indian stock market. 

The recovery came as the BJP led NDA alliance managed to secure verbal promises from its two major allies including Chandrababu Naidu’s led TDP and Nitish Kumar’s Janata Dal United (JDU), cementing its place in parliament and restoring faith in investors, while brushing away any fears of a hung parliament or a change in government. 

TDP secured 16 seats, JDU 12 and the BJP won 240 seats in the 2024 general elections. According to reports, both alliance partners will hand in letters of support to the ruling party today, in a NDA alliance meeting in New Delhi at 5 PM.

In 2021, the Modi government came as an important lifeline for Vi as it was on the verge of shutting down due to heavy losses and non payment of its dues. The BJP government, however permitted telecom companies to convert interest on deferred spectrum payments and AGR dues into equity, resulting in it becoming the single largest stakeholder in Vodafone Idea. 

In the last quarter of fiscal 2024, Vodafone Idea (Vi) witnessed a 19.5 per cent year-on-year increase in losses, with a reported loss of Rs 7,674.6 crore compared to Rs 6,418.9 crore in the same period last year. 

Despite this, revenues for the operations remained relatively unchanged year-on-year. In Q4 FY24, Vi recorded revenues of Rs 10,606.8 crore, slightly higher than the Rs 10,531.9 crore reported in Q4 FY23.

Vi in April raised nearly Rs 18,000 crore in its follow-on public offer, which was subscribed seven times.

At 15:02; the stock of the company trading 12.40 per cent higher at Rs 14.87 per share. By comparison the BSE Sensex was up 3.32 per cent.