Vodafone Idea shares surge nearly 35% on reports Google looking to make investment in embattled telco

FP Staff

Shares of Vodafone Idea Ltd were up 34.87 percent to hit the intraday high of Rs 7.85 per share on the BSE on Friday on reports that Google Inc. is considering picking about 5 percent stake in Vodafone Idea Ltd-a telecom joint venture between Vodafone PLC of UK and Aditya Birla group.

According to a report in Financial Times, Google is looking to make an investment in the embattled Indian telecom company.

At 10:52 AM, Vodafone Idea was at Rs 7.56 per share, up 29.9 percent.

On NSE, it rose sharply by 25 percent to Rs 7.25

A combined 352 million equity shares changed hands and there were pending buy orders for 83 million shares on the NSE and BSE, the exchange data shows.

Shares in Vodafone Idea Ltd jumped 25 percent and hit an upper limit after a report that Google was eyeing a stake in the telecom firm.

Tech titan Google is said to be exploring taking a minority stake in British telecom group Vodafone's struggling India business.

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The investment in Vodafone Idea will pit the search giant against Facebook which has picked up a stake in Jio Platforms, the firm that houses India's youngest but biggest telecom company, Reliance Jio, according to a PTI report.

Alphabet Inc's Google is looking to buy about 5 per cent stake in Vodafone Idea Ltd, the Financial Times reported on Thursday.

Both companies refused to comment.

Google eyeing stake in Vodafone Idea

The move by Google follows Facebook and other private equity investors pouring in $10 billion in Jio Platforms, which holds billionaire Mukesh Ambani's telecom firm, Jio.

The move assumes significance as Vodafone Idea Ltd (VIL) -- where Vodafone holds just over 45 percent stake -- is staring at nearly Rs 58,000 crore in unpaid statutory dues.

These dues arose after the Supreme Court, in October last year, upheld the government's position on including revenue from non-core businesses in calculating the annual AGR (Adjusted Gross Revenue) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.

The Department of Telecom (DoT's) as per its own submission to the apex court earlier this year seeking relief in payment tenures, had put dues of three telecom companies -- Bharti Airtel, Vodafone Idea and Tata Group at Rs 1.19 lakh crore.

Against this, Bharti Group had calculated its dues at Rs 13,004 crore, Vodafone Idea at Rs 21,533 crore and Tata Group of companies at Rs 2,197 crore.

In March, following an approval by the Cabinet, an application was moved before the Supreme Court (on March 16, 2020) seeking its permission for the licensees impacted by the AGR judgement to pay the unpaid amount of the DoT-calculated dues in annual instalments over 20 years.

Vodafone Idea has been under severe financial pressure, and analysts time and again have cautioned that company's longer-term viability remains under cloud.

In December, Vodafone Idea Chairman Kumar Mangalam Birla had said VIL may have to shut if there is no relief on the statutory dues.

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost)

--With agency inputs

Also See: Google mulling stake in Vodafone Idea positive, but inadequate to solve telcos' debt woes: Analysts

Vodafone Idea issues clarification: No proposal from Google on investment, says telecom major; evaluating various opportunities

KKR-Reliance Jio Platforms deal: All you need to know about the US-based private equity firm

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