Vodafone Idea surges over 6% on govt grabbing slice of telco

Shares of Vodafone Idea rose over six percent on February 2 on optimism that the company could see a lower dilution in total shareholding after conversion of interest on deferred spectrum instalments and adjusted gross revenue (AGR) dues to the government.

Vodafone Idea’s peer Tata Teleservices on February 1 told bourses the company has rowed back from its decision to convert the interest on the deferred spectrum and AGR dues into equity shares worth Rs 850 crore.

The reversal came as the Department of Telecommunication (DoT) informed the company the net present value of the due was Rs 195.2 crore and not Rs 850 crore. “As the interest amount eligible for conversion is much lesser than expected, the board has decided to withdraw the desire expressed for conversion,” Tata Teleservices said.

The decision saw shares of the company end 5 percent higher at Rs 148.8 on the National Stock Exchange.

Last month, Vodafone Idea informed investors it had approached the DoT for conversion of its interest on deferred spectrum payment and AGR dues into an equity stake. Accordingly, the company would have given the government a 35.8 percent holding in lieu of converting interest burden and AGR dues worth Rs 16,000 crore.

Now, with the DoT revising down the interest burden of Tata Teleservices, investors hope that Vodafone Idea may also benefit from a similar revision.

Business news channel CNBC Awaaz reported earlier today that Vodafone Idea has so far received no such communication from the DoT.

Investors, however, expressed confidence that the company may not have to dilute as much stake as calculated earlier.

Total volumes on the scrip hit 440 million shares as against the 20-day average of 372 million. The delivery volumes as a percentage of total volume were at 23.2 percent, slightly lower than the 20-day average of 25 percent.

Shares of Vodafone Idea ended 6.5 percent higher at Rs 11.4 on the NSE. MoneyControl