In Monday’s trading session, the shares of one of the leading telecommunications stock in India specialized in providing a wide range of mobile and internet services jumps upto 7 percent following Update on Waiver of Bank Guarantees for Telecom Operators Spectrum Purchases.
Price action
With a market capitalization of 52,065 Crores on Monday, the shares of Vodafone Idea Limited is up by 7 percent making a high of Rs 7.99 compared to its previous closing price of Rs 7.47.
What Happened
Vodafone Idea Limited, formed through the merger of two telecom giants, Vodafone India and Idea Cellular, specializes in providing a wide range of mobile and internet services.
Vodafone Idea Limited has received a significant update from the Department of Telecommunications (DoT), which has waived the requirement for submitting Bank Guarantees (BGs) for spectrum acquired in auctions held between 2012 and 2021.
Previously, Vodafone Idea Limited (VIL) was required to provide BGs worth about Rs. 24,800 crore for each spectrum installment. Now, VIL will not need to provide BGs for the auctions in 2012, 2014, 2016, and 2021. However, there is still a small shortfall for the 2015 auction, and discussions are ongoing with DoT to finalize the amount.
This waiver highlights the government’s ongoing support for the telecom sector and will help operators focus on expanding 4G and 5G networks in India.
About the company
Vodafone Idea Limited, a leading telecommunications company in India, specializes in providing a wide range of mobile and internet services. Formed through the merger of two telecom giants, Vodafone India and Idea Cellular, the company offers voice, data, and value-added services across the country.
They focus on delivering high-quality mobile connectivity, internet services, and digital solutions, catering to millions of customers in both urban and rural areas. With a strong commitment to innovation, it is actively investing in network infrastructure, including 4G and 5G technologies, to meet the growing demand for faster and more reliable communication services.
Shareholding pattern
The shareholding pattern of Vodafone Idea is as follows: the promoters hold 37.17 percent, Foreign Institutional Investors (FIIs) own 12.77 percent, while Domestic Institutional Investors (DIIs) hold 6.99 percent. The public holds the largest share, accounting for 43.07 percent.
Market Structure as of September 2024
As of September 2024, the Indian telecom market is led by Reliance Jio with a market share of 40.2 percent, Bharti Airtel follows with 33.2 percent, while Vodafone Idea holds 18.4 percent. The combined market share of BSNL and MTNL is 8.2 percent.
Financials
The company’s revenue rose by 4.5 percent from Rs 10,750 crore to Rs 11,232 crore in Q2FY24-25. Meanwhile, Net loss declined from Rs 8,737.9 crores to Rs 7,175.9 crore during the same period.
Written by Sridhar J
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