The stock trades in the futures & option (F&O) segment, which has no circuit limits. The stock of the telecom services provider had hit a record low of Rs 6.33 on January 27, 2023. Around 500 million equity shares have, so far, changed hands on the BSE and NSE.
At 10:51 AM; the stock was up 23 per cent at Rs 8.35. In comparison, the S&P BSE Sensex was down 0.7 per cent at 60,432.
With this, the government will have a 33 per cent stake, making it the biggest shareholder in the financially-stressed telecom joint venture between UK’s Vodafone and Kumar Mangalam Birla-owned Aditya Birla Group.
The development comes nearly 13 months after the Vi board cleared the interest conversion. Even as the Union Cabinet had cleared a telecom package including conversion of dues into equity in October 2021, the government had recently put a condition that promoters of Vi must infuse funds into the telco before any equity conversion could take place.
While the government's decision to opt for equity conversion instead of interest payments due from Vi removes an overhang, large fund infusion from promoters/investors will be crucial for the company to repay near-term dues and sustain investments, according to analysts. READ MORE
"This was long awaited decision. Key will be how quickly company raises fund as it has failed to pay its vendors, while lagging in network spends. We do not expect any major relief till a big fund raise or strategic investment is seen," ICICI Securities said in a note.
Meanwhile, shares of Indus Towers, too, surged 15 per cent to Rs 164.80, on hopes of getting its dues from Vi. The stock had hit over two-year low of Rs 135.20 on January 27, 2023.
For October-December quarter (Q3FY23), the company posted a net loss of Rs 708 crore, mainly due to provision for doubtful debt of Rs 2,201 crore and exceptional charge of Rs 493 crore. The company had made a net profit of Rs 872 crore in September quarter (Q2FY23).
In Q3FY23, the company's revenues were down 12.7 per cent quarter-on-quarter (QoQ) and 5 per cent year-on-year (YoY) at Rs 6,765 crore. The reported earnings before interest, taxes, depreciation, and amortization (ebitda) were down 68.6 per cent YoY at Rs 1,163 crore, with Ebitda margins down 36 percentage points YoY at 17.2 per cent. The company provided against doubtful debts of Rs 2,270 crore against dues from Vi.
Indus Towers is India's leading provider of passive telecom infrastructure and it deploys, owns and manages telecom towers and communication structures for various mobile operators.
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