Mumbai: Shares of Vodafone Idea jumped 35 percent in Friday’s trade after a Financial Times report on Thursday said Alphabet Inc’s Google is exploring an investment in Vodafone Group Plc’s struggling India business. Vodafone Idea shares surged 34.87 percent to hit an intraday high of Rs 7.85 on the BSE. The stock has risen nearly 80 percent in the last one month, while Sensex dropped 2 percent in the same period. Google is considering buying a stake of about 5 percent in Vodafone Idea, the FT reported, people familiar with the matter. For a 5 percent stake, Google will have to shell out $110 million. Its Nasdaq-listed parent Alphabet has a market cap of $968.05 billion."Amidst reports of Google picking up 5% stake in Vodafone Idea, it appears that the Indian telecom and online space is set to witness a spur of activity, which is always welcome. It would offer consumers a better deal and competition in this space is definitely required as the digital space has gained massive importance post-COVID-19 and is set to witness multifold growth in coming years," said Aamar Deo Singh, Head Advisory, Angel Broking. The FT report said Google’s parent Alphabet was in talks to buy a stake in Reliance Industries Ltd’s Jio Platforms but lost out to Facebook in closing the deal. “Pursuing Vodafone Idea instead would potentially pit Google against Facebook and an increasingly dominant Jio but the company could also make multiple investments in India,” the report said. Last month, Facebook Inc agreed to invest $5.7 billion for a 9.99 percent stake in RIL’s digital arm, Jio, which competes with Vodafone Idea and Bharti Airtel Ltd in India’s fiercely competitive telecom market. Indian telecom space is now dominated by two players Reliance’s Jio and Bharti Airtel, while Vodafone Idea has been struggling to see if it can see a revival. The telecom giant that emerged after the merger of Vodafone and Idea, has been asked to pay Rs 58,000 crore by the Department of Telecommunications. The company’s self-assessment puts the adjusted gross revenue (AGR) dues at Rs 21,533 crore of which the company had paid Rs 6,500 crore till the middle of March. Meanwhile, Vodafone Group Plc is likely to inject Rs 285 crore (35 million euros) more into its India telecom JV - Vodafone Idea - by September, as per a pre-agreed mechanism. Earlier this month, the UK group also raised concerns regarding Vodafone Idea's ability to generate cash to settle or refinance its liabilities and guarantees, including those related to its AGR dues. (With inputs from ET Bureau)
from Economic Times https://ift.tt/2zG3YK6