Vodafone Idea shares soared in the intraday trade on Tuesday, April 1, after major developments in the company.
Indian Government Expands Stakes
The Indian government, which already owned a major chunk of the company, has now expanded its presence further in the company that was once the largest in India.
Vodafone Idea, or VI, is the third largest telecom company in India, behind Reliance Jio and Bharti Airtel.
However, what that statistic does not reveal is the lack of sway the company has in the market, as its share in the market has dwindled at a ridiculously fast pace, with the incessant exodus of its subscribers.
Converts Dues Into Stakes
Amid its shrinking ground, the government of India has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares, thereby increasing its stake in the struggling telecom venture.
The total amount to be converted into equity shares is Rs 36,950 crore.
Post the completion of the said transaction, the Government of India shareholding in Vodafone Idea will rocket from the existing 22.60 per cent to about 48.99 per cent.
The promoters will continue to have operational control of the company.
Vodafone Shares In Overdrive
When we look at the company shares and their progress, the stock price, understandably got a jump start, opening at Rs 7.48 per share, higher than the previous day's Rs 6.80 per share.
This surge, soon only grew in magnitude, hitting the upper circuit in the process.
At the time of writing, this massive surge in Vodafone Idea shares amounted to 18.68 per cent or Rs 1.27 per piece, taking the overall value of the Mumbai-based companys' stock to Rs 8.07 per piece.
