Vi gains 10% on reports of Amazon & PEs Rs 20,000 crore investment plan

Sources say that the proceeds of the sale will be utilized to bid for the upcoming 5G spectrum auction and roll-out of services by end of the year.

Shares of Vodafone Idea (Vi) gained 10 per cent to Rs 10.23 on the BSE in Tuesday’s intra-day trade, on the back of heavy volumes. The spike comes after a media report suggested that American retail major Amazon and a clutch of investors are in talks with Aditya Birla Group to invest up to Rs 20,000 crore in the wireless telephone company.

At 10:50 am; Vi traded 9 per cent higher at Rs 10.13, as compared to 0.23 per cent decline in the S&P BSE Sensex. In the past three days, the stock rallied 19 per cent. Data shows that around 290 million equity shares changed hands on the NSE and BSE.

According to a report by Business Standard, sources say that the proceeds of the sale will be utilized to bid for upcoming 5G spectrum auction and capital expenditure for roll-out of services by end of the year. Apart from Amazon, the group is in talks with private equity investors who plan to take exposure in the Indian telecom sector. CLICK HERE FOR FULL REPORT

In the past one month, Vi outperformed the market by gaining 8 per cent, as compared to 2 per cent decline in the S&P BSE Sensex. Besides that, the stock gained 18 per cent in a year, as against 7 per cent rise in the benchmark index.

Meanwhile, for January-March quarter (Q4FY22), Vi's losses narrowed by 6.5 per cent to Rs 6,563 crore on a year-on-year (YoY) basis on the back of revenue growth, whereas, earnings before interest depreciation tax and amortization (EBITDA) grew 5.4 per cent YoY to Rs 4,649 crore.

That apart, the company's average revenue per user (ARPU) improved to Rs 124, up 7.5 per cent QoQ versus Rs 115 in Q3FY22, supported by tariff hikes in November 2021. Though the company lost 3.4 million subscribers sequentially as its user base stood at 243.8 million, it added one million 4G customers with an overall user base count at 118.1 million.

The management remains confident of the company's potiential to increase data usage per 4G customer that stands at around 13.9 GB/month vs around 12.9 GB/month, a year ago. Hence, the overall data volumes witnessed healthy growth of 7.9 per cent YoY in Q4FY22.

The management also believes that the government's reform package, return of bulk of the bank guarantees till date, industry wide tariff hikes and the recent promoter infusion are significant positive catalysts for the company.

“All these developments are being perceived positively by the investor and lender community aiding our on-going discussion on further fund raise. We will make suitable disclosures on the fund raising as appropriate,” the management said. CLICK HERE FOR MORE DETAILS