Vodafone Idea shares zoom nearly 20% after reforms announcement

New Delhi, Sep. 16 (PTI): Shares of Vodafone Idea continued to gain on Thursday and further jumped nearly 20 per cent after the Union Cabinet approved a big-bang relief package for the stressed telecom sector.

The stock zoomed 17.58 per cent to INR 10.50 on the BSE.

At the NSE, it rallied 19.55 per cent to INR 10.70.

Vodafone Idea had gained 2.76 per cent in the previous trade also.

“The Union Cabinet approved reforms in the telecom sector both near and medium-term which should improve the outlook for all the players in the sector. While the moratorium ensures the survivability of VIL in the near to medium term, we believe even Bharti and Jio would benefit from this decision Bharti’ cash flows are likely to further improve while Jio can increase its focus on its customer acquisition strategy without the overhang of a regulatory nudge to hike tariffs at present,” according to a report by JM Financial Institutional Securities Limited.

Bharti Airtel rose by 2.52 per cent to its 52-week high of INR 743.90 on the BSE.

The Union Cabinet on Wednesday approved a big-bang relief package for the stressed telecom sector that includes a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.

The measures, aimed at providing relief to companies such as Vodafone Idea that have to pay thousands of crores in un-provisioned past statutory dues, also include the scrapping of Spectrum Usage Charge (SUC) for airwaves acquired in future spectrum auctions.