Despite being in a slump for the last few months, telecommunication company Vodafone Idea witnessed a significant spike in share prices over the last two market sessions. On Friday and Monday, VI shares grew by over 30 per cent.
Vodafone Idea shares rose by 10 per cent on January 1, during the first market session of 2024. Earlier, VI shares rose by over 20 per cent on Friday, leading to a cumulative rise of 30 per cent over the last two market sessions.
While the shares of VI have witnessed a significant rise over the last week, the company is awaiting the final call regarding its funding, the deadline for which was December 31, set by the Department of Telecommunications.
One of the main reasons behind the growth of VI’s share price is the payment of ₹1700 crore to the Department of Telecommunications last quarter to pay for the spectrum it acquired in 2022, which instilled confidence in shareholders.
Another reason behind the share price spike is that VI has announced publicly that it is in talks with vendors regarding the upcoming launch of the 5G spectrum. The management has also talked about infusing ₹2000 crore into the company by the end of December 2023, but no confirmation on the same has been given by the company yet.
Vodafone Idea CEO Akshaya Moondra, as quoted by CNBC TV 18, said earlier, “In the last quarter, we had gotten a letter from the promoters that they will support us to the extent of ₹2,000 crore. Till date they have not actually contributed anything. We had gotten some bank funding to tide over the short term mismatch that we had in the last quarter.”
Vodafone Idea’s plan for 5G rollout
In the last quarter, Vodafone Idea’s top management had said that the company is in talks with vendors to prepare a proper plan for the 5G rollout in the country, also adding that a significant expansion of the 4G spectrum of VI will also take place once the funding is finalised.
Vodafone Idea Chairman Kumar Mangalam Birla had also talked about making “significant investments” in the 5G rollout across the country over the next few quarters, without specifying any timeline for the same.
VI shares will likely be uplifted more after the 5G rollout brings back some of its subscriber base. During September, Vodafone Idea lost around 7.4 million subscribers, according to TRAI data.