Vodafone Idea Share Image Credit source: ai generated
Today there is widespread disappointment in the stock market. The rising prices of crude oil have spoiled the mood of the market, but even in this falling market, one stock is rapidly attracting the attention of investors. We are talking about Vodafone Idea. On Monday, May 11, when Nifty and Bank Nifty were falling, this telecom share took a huge jump of 10 percent and touched the level of Rs 12.37. What happened that this stock became a rocket unlike the entire market? Let us understand this entire matter in detail.
Telecom shares shine in falling market
On one hand, the stock market has been hit twice by the rising prices of crude oil and the weakening rupee against the dollar. Nifty is swinging near the level of 23,900 after falling about 250 points. The condition of Bank Nifty is even worse, which has fallen by more than 600 points. India VIX, which measures market fear, has increased by 9 percent. Despite this, Vodafone Idea shares bravely faced this tsunami of the market. This stock, which closed at Rs 11.25 last Friday, opened today at Rs 11.22 and in no time reached the day’s highest level of Rs 12.43. During this period, the market cap of the company reached Rs 1,31,636 crore.
A big news from Britain
There is a big strategic reason hidden behind this spectacular rise. According to Bloomberg report, Vodafone Group PLC is planning to financially strengthen its Indian unit. This is an opportunity for a new beginning for the company after getting relief related to the outstanding spectrum fees by the Government of India. Now Vodafone PLC is going to make a new move to repair its balance sheet. The company is considering ‘share transfer model’ instead of investing cash. At present, Vodafone PLC has 19 percent stake in Vodafone Idea, the total value of which is estimated at around Rs 23,160 crore. Some part of this can be transferred to the Indian company in the form of ‘treasury stock’.
Benefits of common investors with the company
Now the question arises that what will the company gain from this transfer? Actually, when Vodafone Idea (Vi) gets these shares, it will be able to raise a huge amount by selling them in the market or by pledging them to investors. This money will be directly used in the infrastructure and network expansion of the company. Market experts believe that this step will improve the financial condition of the company.
Apart from this, a big change has also been seen at the management level. On May 5, Ravinder Takkar resigned from the post of non-executive chairman, in whose place veteran industrialist Kumar Mangalam Birla has now taken charge. Both these big developments have brought back the confidence of investors. Bonanza Research analyst Khushi Mistry also believes that this rise is a direct result of expectations of regulatory support and fund raising.
Excellent track record of consistent profits
If we look at the recent performance of this stock, it has not disappointed the investors. In the last one week alone, this stock has given returns of more than 16 percent. If we look at the figures of one month, it has increased by about 32 percent. It is proving to be a multibagger for long-term investors, because in the last one year this stock has earned a handsome profit of about 84 percent.
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Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.
