Vodafone Idea stock has dipped over 14% in the noon session. The telco has been struck very badly from the intent of selling the stake shown by its second-biggest promoter - Aditya Birla Group. Kumar Mangalam Birla had written in a letter to the Union Cabinet Secretary about his willingness to let go of his group’s promoter stake in Vodafone Idea Limited (VIL) and sell to the government. On Tuesday, during the morning session of trading, VIL’s stock had plunged by 10% and had closed at Rs 7.40.
Vodafone Idea Stock Opens Low On Wednesday
Vodafone Idea stock opened low on Wednesday than its previous closing. The stock had closed at Rs 7.40 on Tuesday and opened at Rs 7.15 on Wednesday. As of now, the telco’s share is running 14% lower at Rs 6.35 than its previous closing and had dipped to Rs 6 as well.
The telco requires cash in the short-term desperately to ensure its survival. It isn’t like Vi will vanish in a day. But the telco has not seen profits for years, and its goal of finding an investor to raise Rs 25,000 crore has also not seen any success.
Neither Birla Group nor the leading promoter Vodafone Group wants to infuse any more capital in the loss-making telco. This is evidence that the company might not find a new institutional investor anytime soon. Note that the government is working on a relief package for the telecom sector already.
The relief package should help Vodafone Idea in the short term. The telco’s best bet right now is the Indian customers who are looking for excellent 4G services. If Vi goes out of the market in the next few years, it will boil down the competition between Reliance Jio and Bharti Airtel, which won’t be a good thing for the Indian Telecom sector. It is imperative that government steps in and bails out Vi as soon as possible.