share market latest news- Vodafone Idea to MTNL — why are telecom stocks skyrocketing?

Telecom stocks witnessed a sharp upsurge in early morning trade on November 26, amid reports that the Union Cabinet approved the waiving of bank guarantees for telecom operators. Vodafone Idea shares jumped 14.20% to ₹7.66 apiece, while MTNL shares surged nearly 9% to ₹51.45 apiece.




Telecom stocks witnessed a sharp upsurge in early morning trade on November 26, amid reports that the Union Cabinet approved the waiving of bank guarantees for telecom operators. Vodafone Idea shares jumped 14.20% to ₹7.66 apiece, while MTNL shares surged nearly 9% to ₹51.45 apiece.

On Monday, the Union Cabinet approved the waiver of bank guarantees for telecom operators on spectrum purchased before 2022, citing sources.

The move has come as a relief to Vodafone Idea, which owes the government over ₹24,700 crore in bank guarantees (BG), sources told the news agency. Indian telecom operators, including Airtel and Vodafone Idea, collectively hold more than ₹30,000 crore in BG obligations


The report highlights that the Cellular Operators Association of India (COAI) has urged the government to revoke bank guarantee (BG) requirements for telecom operators on spectrum purchased before 2022

This move is aimed at improving cash flow and enabling greater network investment. While the 2021 telecom reforms removed the BG requirement for spectrum bought from 2022 onwards, operators are still required to provide BGs for deferred payments on pre-2022 spectrum

Debt-laden Vodafone Idea had called for the waiver, arguing it would ease its payment burden and allow for additional credit from banks. The company recently missed BG payments, including one for ₹350 crore due in November and another for over ₹4,600 crore in September, as per the report.

To continue its operations and compete with Airtel and Jio, Vodafone Idea is seeking ₹25,000 crore in loans and ₹10,000 crore in BGs or letters of credit. The company recently raised ₹24,000 crore through equity.

The company reduced its consolidated loss to ₹7,176 crore in the fiscal second quarter ending September 30, compared to a loss of ₹8,737 crore during the same period last year. Revenue from operations in Q2 rose to ₹10,932 crore, up from ₹10,716 crore in the previous year.

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