Vodafone Idea's share price has been on a roll, surging 6% to ₹12 apiece after the company raised ₹3,300 crore through secured non-convertible debentures (NCDs). This fundraise is expected to support the company's capital expenditure programme and business growth, and it's not the only good news for investors.
The fundraise came just eight weeks after the financially stressed company received a fresh lease of life from the Supreme Court. The telco is emerging from a difficult period, with pending dues to the central government mounting to ₹2 trillion, putting the company at risk of bankruptcy. However, the dues are currently under review following a late-October Supreme Court order.
Of the ₹2 trillion dues, Vodafone Idea's AGR liabilities alone stood at ₹78,500 crore as of the end of September. The remaining amount largely comprises payments owed to the government for wireless spectrum purchased in auctions. The company plans to spend between ₹7,500 crore and ₹8,000 crore on capital expenditure in the current financial year, with ₹4,200 crore already spent in the first half to improve 4G network coverage and roll out 5G services.
Vodafone Idea shares have seen a strong reversal in trend in recent months, driven by multiple positive triggers. The shares have remained higher since August and have surged 96% since touching a two-year low in August. Analysts expect the stock to extend its rally amid a favourable technical setup, with some predicting it could touch the ₹14 and ₹16 levels.
Remember, this is a perspective, not a prediction. It's essential to do your own research and consult with certified experts before making any investment decisions.
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