Voda Idea jumps 35% on Google reports targeting 5% stake in telecommunications

Mumbai: Vodafone Idea shares rose 35 percent on Friday after a Financial Times report Thursday said Google from Alphabet Inc. is considering an investment in Vodafone Group Plc’s difficult Indian business.

Vodafone Idea shares rose 34.87 percent to hit an intraday high of 7.85 rupees on BSE. The stock rose nearly 80 percent last month, while Sensex fell 2 percent over the same period.

Google is considering buying a 5 percent stake in Voda Idea, the FT reported, people familiar with the matter.

For a 5 percent share, Google has to shell out $ 110 million. The parent company Alphabet, listed on Nasdaq, has a market capitalization of $ 968.05 billion.

“Amid reports that Google has acquired a 5% stake in Vodafone Idea, it appears that the Indian telecommunications and online sectors will experience a number of activities that are always welcome. This would offer consumers a better deal and promote competition in this area. ” definitely required as ..
The digital space has grown enormously in importance after COVID-19 and will see multiple growth in the coming years, “said Aamar Deo Singh, Head Advisory at Angel Broking.

According to the FT report, Google’s mother alphabet was in talks to acquire a stake in Reliance Industries Ltd’s Jio platforms, but lost to Facebook when the contract was signed. “The pursuit of Vodafone Idea could potentially turn Google against Facebook and an increasingly dominant Jio, but the company could also make several investments in India,” the report said.

Last month, Facebook Inc agreed to invest $ 5.7 billion in a 9.99% stake in RIL’s digital arm Jio, which competes with Vodafone Idea and Bharti Airtel Ltd in the highly competitive Indian telecommunications market.

Indian telecommunications space is now dominated by Jio and Bharti Airtel, two Reliance players, while Vodafone Idea struggled to see a resuscitation.

The telecommunications giant that emerged after the merger of Vodafone and Idea was asked by the Department of Telecommunications to pay 58,000 rupees.

According to the company’s self-assessment, gross adjusted earnings (AGR) totaled 21,533 billion rupees, of which the company had paid 6500 billion rupees by mid-March.
In the meantime, Vodafone Group Plc is expected to contribute 285 billion rupees (35 million euros) more to its Indian telecommunications joint venture – Vodafone Idea – by September, according to a pre-agreed mechanism.

Earlier this month, the UK group also raised concerns about Vodafone Idea’s ability to generate cash to settle or refinance its liabilities and guarantees, including those related to EGR fees.

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