Vodafone Idea share price zooms 7%; stock jumps 14% in 1 month

Earlier this week, Vodafone Idea reported a consolidated net loss of ₹6,609.3 crore for the third quarter of the 2024-25 financial year (Q3 FY25). Its net loss stood at ₹6,985.9 crore in the corresponding period last year.

The telco’s revenue from operations stood at ₹11,117.3 crore during the quarter under review, jumping 4.16% year-on-year (YoY) from ₹10,673.1 crore registered in the December quarter of the 2023-24 fiscal year (Q3 FY24).

Meanwhile, on Thursday, a news report said that the Department of Telecommunications (DoT) has asked Vodafone Idea to provide a bank guarantee of ₹6,090 crore and has set a deadline of March 10 for compliance.

This bank guarantee is meant to cover a one-time shortfall in payments for spectrum acquired after 2015, according to a report by Moneycontrol.

"To ease the financial strain on the company, the government has offered VIL the option to make a cash payment of ₹5,493 crore instead of furnishing the full bank guarantee, the report added," citing sources.

However, the telecom operator must choose between the two options and comply with the DoT’s directive.

In December 2024, the telecom department waived the requirement of a bank guarantee to be submitted for spectrum auctions held before the 2021 Telecom Reform Package, Vodafone Idea said, adding that the latest "relief" will boost 4G and 5G investments in India.

Before this reform, bank guarantees aggregating to about ₹24,800 crore were required to be provided by VIL against each spectrum installment.

"As per our understanding of the terms and conditions, out of all the 5 auctions, no BGs (bank guarantees) will be required to be provided by VIL for 2012, 2014, 2016, and 2021 auctions," the telco said.

There would, however, be a one-time partial shortfall, only for the 2015 auction, where the net present value, or NPV, of all payments made, would be less than the pro-rated value of the spectrum used, VIL said, and it was informed that it was "in discussion with the DoT to determine the final amount of this partial shortfall for the 2015 auction."

"This step of the BG waiver is a clear indication of the government's continued support for the telecom industry. It will ensure that the exposure of the banking system is utilised by telecom operators towards the further proliferation of 4G and 5G networks in India," the VIL filing said.

As per the telecom reform package of 2021, no bank guarantee was required to be provided for the spectrum auction held post-reform package.

The DoT, in a communication dated December 27, 2024, has dispensed with the requirement of submission of Financial Bank Guarantees for the spectrum acquired in auctions held in 2012, 2014, 2015, 2016, and 2021, subject to certain terms and conditions.

In the past 30 days, the share price of Vi has rallied 14%. In comparison, the BSE SENSEX has gained 0.53%, BSE data show.