Vodafone Idea shares surged as much as 48 per cent to Rs 4.49 apiece on BSE in Wednesday’s trade following the reports that the government is unlikely to invoke the firm’s bank guarantees. As the government officials from the finance and the telecom ministry met today, they indicated doing all that is possible to retain at least three private players in the industry, Technical analyst Milan Vaishnav, CMT, MSTA, told Financial Express Online. Vodafone Idea Chairman Kumar Mangalam Birla met Telecom Secretary Anshu Prakash yesterday and denied to respond to queries on whether or not Vodafone Idea would default on payment of AGR dues or if the company could head towards insolvency. Earlier on Friday, Supreme Court slammed the telcos saying that they were in contempt of its order to pay the dues amounting to Rs 1.47 lakh crore. Analysts suggest investors to exit their investment in Vodafone Idea citing regulatory-related volatility and risks.
"Currently the sector is witnessing a lot of regulatory-related volatility and risks. It's not good to have any view for investment purposes unless some clarity related to the AGR issue emerges. Only short term trading could be done and investment should be avoided as of now," Narendra Solanki, Head Fundamental Research (Investment Services) – AVP Equity Research, Anand Rathi Shares & Stock Brokers told Financial Express Online. However, after SC AGR order on modification pleas by telecom companies on Friday Vodafone Idea share price slumped more than 22 per cent to close at Rs 3.50 apiece.
Around 2.45 PM, Vodafone Idea shares were trading 31.35 per cent higher at Rs 3.98 apiece on BSE. Vodafone Idea on Monday paid Rs 2,500 crore to the Department of Telecommunication (DoT) and vowed to pay another Rs 1,000 crore by Friday to clear a part of the DoT estimated dues of Rs 53,000 crore. Vodafone Idea investors should stay away from any fresh investment in this stock. "From the investors’ point of view, they should use all the up moves that the stock price shows to exit their investments. There are a lot of uncertainties surrounding this and this makes investments in such stocks at any price with a highly risky proposition. So, existing investors should use up moves to exit until stability on the policy front is seen. So far as fresh buying is concerned in this stock, that should be squarely avoided, " Milan Vaishnav said.