Vodafone Idea Limited (VIL)'s stock price shot up by 18% on Tuesday morning. The price of Vi's shares at the time of writing this is Rs 8.09, up 18.97% to be precise. This is a great start for Vodafone Idea in FY26 in the stock market. Indian government has agreed to covert AGR (adjusted gross revenue) dues worth Rs 36,940 crore into equity for itself in Vodafone Idea. This is the second time the government is doing such a thing. Vodafone Idea's 48.99% stake will be with the government post the conversion.
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Following this announcement from Vi on Sunday night, on Tuesday morning the stock shot up by more than 18%. In fact, Vi's shares touched a high of Rs 8.15 on Tuesday.
Another telecom stock which went up on Tuesday morning is Indus Towers. The share price of Indus Towers is up 6.70% at the time of writing this, trading at Rs 356.70. This is also due to a better future propect of business from Vodafone Idea. VIL is one of the largest client for Indus Towers, and thus, VIL's secure future adds to the business of Indus Towers.
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Vodafone Idea would certainly find it easier to raise funds through debt following this announcement from the government. There still remains to be seen what the government will do about the bank guarantees that need to be furnished by Vi as the telco wants to surrender some of the spectrum to reduce liabilities. The overall debt for Vi will go down signficantly post the conversion of dues into equity.
After the dues to equity conversion, Vi's promoters - Aditya Birla Group (ABG) and Vodafone Group PLC will continue to take the decisions for management. The government will be a sleeping entity in the company, and won't interfere with the decisions of the management.
