The shares of Vodafone Idea Ltd (VIL) on Monday ended with gains of more than 4 per cent after jumping more than 7 per cent. This came as the telco announced that the Department of Telecommunications (DoT) has waived the requirement to submit bank guarantees (BG) for spectrum acquired in auctions held before 2022.
The waiver comes as a big relief to the telco which could now look forward to fresh funding from lenders, expanding its 4G network and also offering 5G services to its customers.
“Banks are not willing to provide the BG facility as it does not really benefit anything in terms of improvement on operations or cash generation," Vodafone Idea CEO Akshaya Moondra had said in the second quarter earnings call
"They are happy to provide the bank funding because that is what will help in turning around the business,’’ Moondra said.
“DoT vide its communication dated December 27, 2024, has dispensed with the requirement of submission of Financial Bank Guarantees for the spectrum acquired in spectrum auction held in 2012, 2014, 2015, 2016 and 2021, subject to certain terms and conditions,’’ VIL said in a regulatory filing to the stock exchanges.
Bank guarantees of around ₹24,800 crore were required to be provided by VIL against the spectrum instalments.