Vodafone Idea share price jumps over 9% on fundraising reports

According to Akshaya Moondra, CEO of Vodafone Idea, during the company’s Q1 FY24 earnings conference call on August 16, they have proposed in a letter to the DoT to pay an installment of ₹1,680 crore for the 2022 auction of spectrum.

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” We have submitted a letter to DoT that we propose to pay Spectrum Auction Instalment of ₹1,680 Crore towards 2022 Auction, which is due on 17th August 2023, by availing the grace period of 30 days with interest, in accordance with the terms of Notice Inviting Applications,” said Moondra.

One of the investors would seek a meeting with officials, according to the CEO of the company, Akshaya Moondra, according to the ET report, in order to obtain guarantees of ongoing government backing. Vodafone Idea plans to raise money to carry out a four-year, Rs. 65,000 crore capital expenditure programme.

“We continue to remain engaged with our lenders for further debt fundraising as well as with other parties for equity or equity-linked fundraising to make required investments for network expansion and 5G rollout to compete effectively. These discussions have gathered momentum and progressed well over the last couple of months. 

We have been improving our performance in the last 8 quarters with limited investments, and we are confident that with the investments coming onstream, we will be able to make more meaningful improvements in our overall performance,” added Moondra during the Q1FY24 earnings call.

According to Avinash Gorakshakar, Head-Research at Profitmart Securities, Vodafone Idea to pay government dues will be entirely dependent on external funding opportunities, which the company has been targetting for a long time. With Vodafone reporting losses for last few quarters a falling customer base and weak cashflows has put significant pressure on the company’s financials offlate. 

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Hence, Gorakshakar said that now it will be a do or die effort to recoup the co from the present financial stress seen offlate.

According to Telecom Regulatory Authority of India (Trai) data, at the end of June, Vodafone Idea lost 1.28 million subscribers, reported PTI.

On the technical front, as per trendlyne data, Vodafone Idea share price fell 6.5% and underperformed its sector by 24.2% in the past year.

“Prices are seen some traction but is placed around key resistance of 200 Weekly moving average, no major view on this counter and one should ideally use further bounce to exit longs,” said Rajesh Bhosale – Equity Technical and Derivative Analyst, Angel One.

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Updated: 25 Aug 2023, 03:47 PM IST