Shares of Vodafone Idea Ltd (VI) skyrocketed more than 18% and hit an intra-day high of Rs 8.28 on 26 November after the Union Cabinet’s approval of a waiver of bank guarantees for telecom companies. 

This waiver marks a significant step toward relieving the financial strain on the industry, with Vodafone Idea anticipated to be one of the main winners of this decision. 

Bharti Airtel’s stock rose more than 1% in response, while Indus Towers Ltd.’s stock shot up to 5%.

The waiver is applicable to spectrum that telecom providers purchased at auctions before 2022.

The action was first suggested by the Department of Telecommunications (DoT) in response to industry requests for assistance. In their letter to the DoT, telecom operators urged that the bank guarantee requirements for spectrum acquisitions made before 2022 be lifted.

This ruling expands upon the Cabinet reforms of 2021, which eliminated the requirement for bank guarantees on spectrum purchased in the future. The government hopes to stabilize the telecom industry and lessen financial strain by retrospectively extending this relief to older spectrum holdings.

Even with today’s increase, the stock has lost more than half of its value in 2024.

At 11:36 am, the shares of Vodafone Idea were trading 13.19% higher at Rs 7.89 on NSE. 

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