Vodafone Idea share price spurts 25% as govt grants nod to convert over Rs 16,000 crore dues into equity

Vodafone Idea Share Price, Idea Share Price News: Shares of Vodafone Idea (Vi) were locked in the 25 per cent upper circuit at Rs 8.50 on the NSE on Monday at 1 PM. The development follows the government's decision to convert the company's dues worth Rs 16,133 crore into equity. With this, the government will have a 33 per cent stake in the telecom services provider. Around 9.47 crore equity shares of Vodafone Idea have exchanged hands, according to NSE data. The stock had hit a record low of Rs 6.33 on January 27.

Ravi Singh, Vice-President and Head of Research at Share India, said that the government's decision to convert the company's accrued interest worth Rs 16,133 crore into equity may give a momentary pull back but it may not sustain for long.

"Investors are advised to stay away from this stock and existing investors may take this opportunity to exit their holdings," he said.

Zee Business panellist and market expert Rakesh Bansal said that Rs 7.50 was a critical level for the stock. After today's gap-up, the next level to watch in Idea is Rs 8 which will act as a big resistance.Last week, the government approved the conversion of over Rs 16,133 crore interest dues of debt-ridden Vodafone Idea into equity, the company said in a regulatory filing. Equity shares of face value of Rs 10 each will be issued to the government at the same price.

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The decision is seen as a relief for the company and comes as part of the reforms package announced by the government in September 2021."The total amount to be converted into equity shares is Rs 16133,18,48,990. The company has been directed to issue 1613,31,84,899 equity shares of the face value of Rs 10 each at an issue price of Rs 10 each," Vodafone Idea said in the filing.

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