Thursday, April 4, 2024

Vodafone Idea rebounds 7% as managing director rules out takeover by government

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Vodafone Idea on Tuesday had said it has exercised the option to convert interest payable for the four years of deferment on the deferred spectrum installments and its adjusted gross revenue dues into equity that will see the government holding a 35.8 percent stake in the company post-dilution.

Shares of Vodafone Idea rebounded more than seven percent to Rs 12.65 on the National Stock Exchange today after nosediving 20 percent on Tuesday as the company clarified that the government will not take over the operations of the telecom operator.

Vodafone Idea on Tuesday had said it has exercised the option to convert interest payable for the four years of deferment on the deferred spectrum installments and its adjusted gross revenue dues into equity that will see the government holding a 35.8 percent stake in the company post-dilution.

The exercise of the option and resultant controlling stake of the government sparked fear among investors that the government will take over operations of the company, which could result in a sharp downgrade in price-earnings multiples.

Further, the large dilution of equity in the company at a steep discount of around 32 percent from the Monday’s close price also did not go down well with investors.

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