Shares of Vodafone Idea zoomed up to 48% intraday on reports that government is unlikely to invoke the telecom firm's bank guarantees to recover AGR dues. Traders said Vodafone Idea shares also rallied on hope that government may announce some measures pertaining to AGR (adjusted gross revenue) dues for the telecom sector, in the Cabinet meeting scheduled today.
Commenting on the broader market, Vinod Nair, Head of Research at Geojit Financial Services said, "Positive cues were witnessed in the market on hopes that the government is planning to consider some relief measures for the ailing telecom players."
Vodafone Idea share price opened with a gain of 5.61% today and later rose 48.18% to Rs 4.49 from its previous close of Rs 3.03. With this rally, Vodafone Idea share has recovered past 2 days of decline.
Vodafone Idea stock traded in a wide range of Rs 1.36 today. Volume-wise, 1,432 lakh shares and 10,155 lakh shares changed hands on BSE and NSE, both above 5,10 and 30-day average volume traded.
Vodafone Idea stock has gained after 7 days of consecutive fall.
After today's rally in Vodafone Idea's stock, market capitalisation of the company rose to Rs 12,040.13 crore compared with Tuesday's close of Rs 8,707 crore. Market depth data on BSE indicates 65% buyers bidding compared to 35% sellers offering the stock by closing bell.
Vodafone Idea stock price trades higher than its 5-day moving averages but lower than 20, 50, 100 and 200-day moving averages. The stock has eroded value worth 7.1% in mere one week, 7% in one month, 31% year-to-date and 77% in one year.
Vodafone Idea chairman Kumar Mangalam Birla on Tuesday met Telecom Secretary Anshu Prakash amid growing concern the government was considering the possibility of invoking bank guarantees of telcos to recover statutory dues. Vodafone Idea had earlier urged the court the bank guarantee deposited with the government should not be encashed.
After the apex court order on Friday slammed telecom companies for not completing the process of recovering AGR dues, Vodafone Idea paid Rs 2,500 crore on Monday and said it would pay another Rs 1,000 crore before the end of this week. The government has estimated Vodafone Idea's AGR dues at Rs 57,000 crore.
Due to heavy trading volumes traded today, the exchange has sought clarification from Vodafone Idea with reference to significant movement in stock price.
The company replied to the exchanges," We wish to inform you that there is no such announcement or price sensitive information, which is pending to be intimated by the company. We wish to reiterate and clarify that all the information furnished is in public domain and Vodafone Idea will comply with SEBI Regulations, and duly keep the stock exchanges informed of all the price sensitive information."