The upmove in the stock price was seen after Union Cabinet approved a waiver of bank guarantees for telecom companies, marking a significant step toward easing the financial burden on the sector, with Vodafone Idea expected to be one of the key beneficiaries.
In response, shares of Indus Towers Ltd. surged up to 5% and Bharti Airtel was up over 1%.
The waiver applies to spectrum acquired by telecom operators in auctions held before 2022, sources told CNBC-TV18.
Earlier, the Department of Telecommunications (DoT) had proposed the move, responding to industry demands for relief. Telecom companies had written to the DoT, urging the removal of bank guarantee requirements for pre-2022 spectrum acquisitions.
This decision builds on the 2021 Cabinet reforms, which waived the need for bank guarantees on spectrum acquired prospectively. By extending this relief retroactively to older spectrum holdings, the government aims to alleviate financial stress in the telecom sector and bolster its stability.
The stock of Vodafone Idea is currently trading 17.36% higher at ₹8.18. Despite today’s gain, the stock has tumbled over 50% so far in 2024.
First Published: Nov 26, 2024 10:03 AM IST
