Vodafone Idea's stocks up 9% in 5 sessions: Here's why
What's the story
Vodafone Idea, a major telecom service provider in India, has witnessed a significant surge in its shares. The company's stock has gained nearly 9% over the last five trading sessions. This comes after its shareholders approved a proposal to raise up to ₹20,000 crore through the issuance of securities. This approval is likely seen by some as a major step toward strengthening the company's financial position and boosting investor confidence.
Subscriber retention
Improvement in customer retention rate
Along with the stock surge, Vodafone Idea has also reported an improvement in its customer retention rate. The company's net subscriber loss in May was 2.74 lakh users, a significant drop from April's 6.47 lakh. This marks a continued trend of declining subscriber exits since February this year and is seen as a positive sign for the company's growth prospects.
Government support
Rumors of government relief package
There have been rumors of a potential government relief package for the debt-ridden telecom company, especially concerning its regulatory dues. However, Vodafone Idea has denied these claims. "We have not received any communication from the government regarding the reported matter," said the company in a stock exchange filing earlier. The denial comes amid broader discussions in the telecom sector about competition and the challenges faced by operators.
Financial challenges
Vi may not survive without Centre's support
Vodafone Idea has long been vocal about its financial woes. The company recently told the Supreme Court that it may not survive without additional government support. Earlier, it had warned of potential operational shutdown by FY26 without fresh relief measures. After a recent equity conversion, the Indian government now holds a 49% stake in the company.