Vodafone Idea share price today: Shares of Vodafone Idea (Vi) jumped 18.08% to Rs 8.23 on the BSE in early trade on Tuesday after the Union Cabinet gave in-principle approval regarding the company’s bank guarantee matter. At 2:53 pm, Vi shares were trading 8.74% higher at Rs 7.59.
The Cabinet offered relief to telecom firms by waiving bank guarantee requirements for spectrum acquisition till 2022. The Department of Telecommunications (DoT) had supported this waiver for spectrum purchases.
The 2021 reforms had already removed bank guarantee requirements for auctions from 2022. With the spectrum auction dues moratorium ending in October 2025, Vi’s total bank guarantee obligation stands at Rs 24,700 crore.
Vodafone Idea on November 1 defaulted on its second bank guarantee (BG) payment of about Rs 350 crore related to spectrum acquired in the 2012 auction. Prior to this, the company had defaulted on a BG payment of over Rs 4,600 crore for the 2016 spectrum auction in September, ET reported.
Though Vi led the BG waiver request with support from other telecom firms, the government’s decision particularly benefited Vi. While competitors Bharti Airtel and Reliance Jio also require BG submissions for past auction payments, their obligations are significantly lower than Vi’s.
Bharti Airtel has to make a BG payment of about Rs 2,200 crore in September next year for the 2016 auction. Jio has an obligation of about Rs 4,400 crore next.
Vi requested the waiver citing financial constraints, anticipating that this would enable banks to provide additional credit facilities to the company.
