Vodafone Idea shares: 2 reasons why telecom stock climbed 4% today

Shares of Vodafone Idea Ltd were trading 4 per cent higher in Thursday's trade after CNBC TV18 suggested that the Controller General of Communication Accounts (CGCA), under the Department of Telecommunications (DoT), completed the reassessment of the licence fee for the telecom operator, following which the licence fee for the telecom operator is seen getting slashed by 60–65 per cent. 

The stock was also in news after ICRA  upgraded the credit rating and revised the outlook assigned to long term, fund-based term loans from ‘Stable’ to ‘Positive’. By 2.51 pm, the scrip had hit a high of Rs 10.35, up 3.6 per cent.

The adjusted gross revenue of Vodafone Idea includes both the licence fee and spectrum usage charge. The assessment of the spectrum usage charge is likely to be completed by March 31, CNBC-TV18, citing CNBC Awaaz sources said.

Earlier, ICRA said its rating upgrade reflected the recent developments pertaining to the revision of Vodafone Idea's adjusted gross revenue (AGR) dues by the government in January and the settlement of the contingent liability adjustment mechanism (CLAM) agreement with VIL’s promoter, Vodafone Group PLC. 

"The AGR liability has been frozen as on December 31, 2025, eliminating further interest accretion from that date. Concurrently, the revised CLAM with Vodafone Group PLC provides Rs 2,307-crore  cash in next 12  months; balance  via monetisation of earmarked 328 crore equity shares of the company over next five years," ICRA said.

The proceeds of the sale of these shares, at the instructions of a person appointed by the company, will accrue to the company, strengthening the funding for capex and providing liquidity buffer, ICRA said.

ICRA believes that these developments will provide a push to VIL’s capex plans that had been deferred due to lack of visibility on the aforesaid matters. 

VIL plans a Rs 45,000-crore capex over three years to expand the 4G coverage in priority circles. It is looking to roll out 5G and augment the capacity. The programme is to be funded by a proposed term debt of Rs 25,000 crore, Rs. 10,000 crore non fund-based facility, internal accruals and other non operating cash inflows including CLAM proceeds, ICRA said. 

"Execution of the capex, alongside an expected industry tariff rationalisation over the next 12–24 months and improving network quality, is expected to support ARPU improvement and OPBDITA growth," ICRA said.