8₹ Telecom stock with high retailer holding gains 30% in 3 days- Check why

Vodafone Idea (Vi) traded under code NSE:IDEA and BOM: 532822 (BSE) is currently trading near its 2 year low of ₹5.8. The share has been continuously declining over the past few months, however on 26th of November, the stock opened on a bullish note. The company marked a gap up opening, which is against the currently prevailing long term negative trend.

In just three trading sessions, Vodafone Idea has gained more than 27%, rising from ₹6.87 to ₹8.34. Even though flagship index Nifty has performed relatively well in recent times, the supportive market was not the main reason behind this rise in IDEA.

Reasons for rise in shares price of IDEA

Earlier, telecom companies had to provide bank guarantees in order to bid for spectrum. Companies like IDEA were already in a tight spot where it was losing its market share to Airtel and Jio. However, on Tuesday the government announced that this rule for bank guarantee which was announced in the year 2022 will no longer exist.

How This Helps Vodafone Idea

• Less Financial Pressure: Vodafone Idea won’t need to provide huge bank guarantees anymore. This was a big worry for them before.
• Saves Money: The company can now use the money it would have spent on these guarantees for other important things.
• Head Room: Vodafone Idea was struggling to make some payments. This decision gives them some relief.

Not just IDEA, but the entire telecom sector should benefit from this rule. Bharti Airtel and Reliance Jio will also receive relief for their spectrum purchases before 2022. Industry body COAI called it a “landmark decision” that would help reduce financial burden on telecom operators. The move is expected to enhance cash flow and enable capital investments in network expansion and technology upgrades.

More recent updates about IDEA

1. VI finalized a $3.6 billion deal with three equipment suppliers (Nokia, Ericsson, and Samsung)
2. Part of a larger $6.6 billion investment plan to expand network infrastructure
3. Key objectives include extending 4G coverage to 1.2 billion people and launching 5G services
4. Plan involves adding 2,15,000-2,20,000 network sites
5. Simultaneously securing additional funding, with Rs 35,000 crore in loan discussions
6. State Bank of India has received the evaluation report
7. Funding expected to be concluded in 7-8 weeks

About Idea

Vodafone Idea Limited is a major mobile network operator in India. The company was formed in 2017 when two big telecom companies – Vodafone India and Idea Cellular – merged together. This merger created one of the largest mobile network providers in India.

The company provides mobile phone services across India, offering voice calls, mobile data, and other telecommunications services to millions of customers. They serve both individual consumers and businesses with their mobile and internet plans. The company has faced significant financial challenges in recent years, particularly after the entry of Reliance Jio into the market, which dramatically changed the telecommunications landscape in India. These challenges have included high competition, regulatory issues, and substantial financial debts.

Despite these difficulties, Vodafone Idea continues to be an important player in India’s telecommunications sector, serving millions of mobile customers across the country.

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