Birla’s big bet, VI’s shares become rocket!
On May 13, there was a sudden jump in the shares of Vodafone Idea. The share which had opened in the morning at a price of Rs 12.17, within a few hours saw a sharp jump of seven per cent to reach Rs 12.72. At the time of market closing, its share price reached Rs 12.76 with a rise of 7.32%.
Why was there such a sudden rise in shares?
It is not possible for any stock to become a rocket in the stock market without any concrete reason. In the case of Vodafone Idea, this reason is the inflow of fresh capital. According to the information that has come to light, the company’s non-executive chairman Kumar Mangalam Birla himself is going to invest new funds in this company. As soon as this information spread in the market, all those retail investors heaved a sigh of relief who were stuck for a long time by investing money at lower levels. If we look at the data of last one month, this stock has already registered a strong growth of up to 38 percent.
Why is the telecom company in dire need of money?
Vodafone Idea needs big investment at this time to stay ahead of its competitors in the market. It requires a huge budget to run its day-to-day operations smoothly, upgrade old technology and purchase new modern equipment. To raise funds, this telecom company is already in continuous talks with a large consortium of banks led by State Bank of India (SBI). However, before giving loan, these banks have put some strict conditions before the company. In such a critical time, the promoter’s decision to come forward and invest is going to prove very important for the company.
The whole picture is changing with the return of Birla.
Telecom companies have recently got a big relief in the matter of huge dues of Adjusted Gross Revenue (AGR). Immediately after this, a major change was also seen within the company. Last week, the management has again given the responsibility of non-executive chairman to Kumar Mangalam Birla in place of Ravinder Takkar. This return of Birla has not only brought back the confidence of the people working within the company, but the outlook of the lenders has also become positive. After this relaxation in AGR case, now banks are also showing their keen interest in giving loans to this telecom giant.
The meeting on May 16 will decide the future of the company
Now the eyes of every investor in the market are fixed on the coming 16th. Vodafone Idea has officially informed the stock markets that a very important meeting of the company’s board of directors is going to be held on May 16. The main agenda of this meeting is to discuss the proposal to raise new capital. The board members will brainstorm on how to bring this fund on equity share, warrant or preferential basis. Experts clearly believe that infusion of capital by the promoter will not only strengthen the confidence of the lending banks but will also restore the confidence of the investors in the company.
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