Vodafone Idea Shares Surged 30% After Reforms Announcement
Shares of Vodafone Idea on Thursday, surged around 30%, hitting an intraday high of Rs 11.50 following the announcement made by the government to relief measures for telecom sector.
On Wednesday, the Union Cabinet announced that a four-year moratorium on pending statutory payments will be adjusted gross revenue (AGR) dues of telecom operators. This move from the centre is much-needed for telecom sector to get relief from AGR dues which will help Vodafone Idea and Bharti Airtel on the cash flow front.
The change in the definition of AGR through the removal of non-telecom revenues and penalty was an area of contention between the telecom operators and the telecom department. AGR was a major cause for the growth of telecom sector and has put extra load on the companies. But, now it will pave ways for telecom operators to make higher capital investments.
The shares of private lenders including IDFC First Bank, Yes Bank and IndusInd Bank also rose as they have exposure of loan books in Vodafone Idea of 3%, 2.4% and 1.7%, respectively. On NSE, the shares of Vodafone Idea Ltd closed 25.70% higher at Rs 11.25 per share.
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