(VIL) share price surged nearly 30 percent in the last two sessions after its former chairman Kumar Mangalam Birla met with Telecom Minister Ashwani Vaishnaw. The group head of Vodafone Group, Nick Read was also in the country on the same day.
"The officials of the Department of Telecommunications (DoT) are understood to have held regular meetings with senior executives of Vodafone Idea over the past few days, as the government tries to work out a revival package for the financially distressed telecom sector, the immediate beneficiary of which would be the ailing telco," sources told Financial Express.
VIL MD and CEO Ravinder Thakkar and SBI Chairman Dinesh Kumar Khara also met with the telecom secretary Anshu Prakash on the same day, the report added.
VIL shares have surged over 12 percent since morning. On Thursday, the shares had rallied as high as 17 percent
to close at Rs 7.14 percent. At the time of writing, VIL shares were trading 8 percent higher at Rs 7.42 percent on the Bombay Stock Exchange (BSE).
The shares seem to have taken off after the news that the government is mulling over some relief measures, not just for the company, but the entire sector.
Vodafone Idea Ltd, which is a joint venture between Aditya Birla Group and Vodafone Group is the country's third-largest telecom operator. But due to cash crunch, it might have to shut its shop, Birla said.
VIL is to pay dues worth Rs 51,400 crore after the Supreme Court dismissed its plea to recalculate the supposed arithmetic errors in the dues. The company is not trying to wriggle out of paying the dues, but the company will no longer be a going concern if it receives no support, Birla had said earlier.
Vodafone Group has also refused to put liquidity into its telco intermediary. And while the government has said it wants to see "healthy competition" in the telecom industry, so far it has not issued any official statement about the relief measures.
Reports suggest the government is considering the possibility
of a push in the floor price for the services provided by the telcos. Another option is an interest-free moratorium on the spectrum payment and enchantment of bank guarantees. Such discussions have gathered pace ever since Birla wrote to the government in June, offering to hand over his stak
e in the company to any government entity that can bring the telco out of the crisis.
(Edited by : Ajay Vaishnav)