Vodafone Idea Hits Upper Circuit After Rs 30,000-Crore Deal With Nokia, Samsung, Ericsson
Vodafone Idea share price surged after a steep 20% decline last Thursday on the back of a Supreme Court verdict regarding adjusted gross revenues.
Vodafone Idea Ltd. share price surged to hit their upper circuit limit of 10% in early trade on Monday. The surge comes a day after the telecom operator announced a $3.6 billion (around Rs 30,000 crore) deal with global telecom equipment suppliers Nokia, Samsung and Ericsson.
An exchange filing had said that this deal will enable the company to embark on a more flexible and modular rollout plan by customising the services for all advanced technologies, including 4G and 5G.
In addition, the new equipment will also lead to efficiency gains in energy consumption and thus lower operating costs. "The supplies against these new long-term awards will start in the coming quarter," the filing said adding that the top priority for the company is to expand the 4G coverage to 1.2 billion Indians.
From the deal, Vodafone Idea will also significantly upgrade its network infrastructure, as part of a broader three-year capital expenditure plan valued at $6.6 billion (approximately Rs 55,000 crore).
The deal and the subsequent rally come as a relief after the Vodafone Idea share price dropped 20% last Thursday. The stock was hit after the Supreme Court rejected telecom companies' plea seeking a re-computation of their adjusted gross revenues. Experts had termed the verdict a huge setback for Vodafone Idea.
Vodafone Idea share rose as much as 14.04% to Rs 11.94 apiece after its upper circuit limit was revised to 15% from 10%. It pared gains to trade 11.17% higher at Rs 11.65 apiece, as of 9:56 a.m. This compares to a 0.5% advance in the NSE Nifty 50 Index.
It has fallen 27.5% on a year-to-date basis and 0.43% in the last 12 months. Total traded volume so far in the day stood at 0.88 times its 30-day average. The relative strength index was at 33.62.
Out of the 22 analysts tracking the company, four maintain a 'buy' rating, three recommend a 'hold,' and fifteen suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target implies a downside of 2.7%.
