Vodafone Idea Ltd. (VIL) stocks have been performing in the stock market quite well recently, even when the SENSEX and Nifty went down two days back. Today, on December 9, the share price of Vodafone Idea went to a 52-week high of Rs. 16.40 on the NSE, up by 14.69%.
Investors are confident about the telecom stock because of some recent developments within the company's planning. Vodafone Idea has finally increased its tariffs in India up to 25%, after a very long time, along with Bharti Airtel and Reliance Jio. According to some analysts believe it is an affirmative and much-needed step for the telecom sector that can help the sector to boost operating profits by around 40%.
Note on adequate spectrum availability at reasonable prices
To become sustainable in the long run, the telecom industry is seeking adequate spectrums at reasonable prices with easy payment norms, rationalization of taxes and levies, and reduction in the burden on the companies due to old litigations, VIL Managing Director and CEO Ravinder Takkar while speaking at India Mobile Congress said recent reforms announced by the government are steps towards addressing financial stress and legacy issues in the sector, PTI reported. VIL's current growth and intensive planning for the growth of the company are helping investors to gain confidence in the company's management. Takkar further added that the industry will look at improving average revenue per user (ARPU) from abysmally low levels.
Telecom sector: expected to grow further
The telecom industry overall is expected to perform well in the stock markets in the future. At the above-mentioned Congress, Aditya Birla Group Chairman Kumar Mangalam Birla commented that the mobile industry will be at a vital role in the union government's vision of a $5-trillion economy by 2025, of which $1 trillion will be contributed from the digital field. Birla also mentioned that ease of doing business, coupled with the banking sector's support will boost the telecom industry in India.
Additionally, a moratorium on the government dues can help the company to focus on 5G technology. As the union government has approved a relief package for the telecom industry, that offered 4 more years to companies for paying the statutory dues, change in the definition of revenue on which levies will be paid, along with allowing 100% on FDI through the automatic route. Hence, these positive outlooks are encouraging investors to gain confidence in the telecom sector, including VIL's stocks.
VIL has also fixed the record date for the next tranche of 7.77% unsecured redeemable non-convertible debentures on December 20, and pay the interest on January 4, 2022, a Business Standard report stated. The English daily has also reported yesterday that the company recently managed to raise funds for the payment of bondholders' interest on time. The company is expected to pay around Rs. 6,000 crore within December 13 to March, next year. VIL is communicating with its lenders and investors to raise funds for repayment of bonds.