Vodafone Idea's stocks have surged as market speculations heat up regarding a potential collaboration between the telecom company and Elon Musk's Starlink. The Securities and Exchange Board of India (SEBI) has stepped in, seeking clarification from Vodafone Idea following media reports suggesting a tie-up between the telecom giant and the American tech mogul's satellite internet venture.
Earlier reports indicated a possible move by the Government of India (GoI) to offload its 33 per cent stake in Vodafone Idea to Elon Musk's Starlink, in a strategic alignment within India's telecommunications sector.
SEBI's intervention came on Monday, January 1, 2024, prompting anticipation within investor circles for Vodafone Idea's response. In an official statement to Indian stock market bourses, Vodafone Idea acknowledged SEBI's request for clarification. The company stated, "The Exchange has sought clarification from Vodafone Idea Ltd on January 1, 2024, with reference to news...dated January 1, 2024, quoting 'Elon's Starlink Tie-Up Talks In Market Pumps Vodafone Idea To The Skies In India'."
Vodafone Idea has now clarified on the said report saying, "We wish to reiterate and clarify that the Company will comply with SEBI Listing Regulations and duly keep the stock exchanges informed of all the price sensitive information."
The anticipation around a potential collaboration intensified last week after reports emerged suggesting Elon Musk's visit to Gujarat on January 10th, 2024, for discussions regarding a partnership with Vodafone Idea. It's speculated that Starlink requires a local partner in India to expand its broadband services via satellite connectivity, igniting a substantial surge in Vodafone Idea's stock value.
From day's high of Rs 17.78, Vodafone Idea shares tumbled 10.23 per cent to hit a low of Rs 15.96 on BSE. The Vodafone Idea stock was up 6.05 per cent on Monday and 21 per cent on Friday.
Technical analysis indicates that Vodafone Idea is currently displaying a relative strength index (RSI) of 76.3, positioning the stock within the overbought territory. Its one-year beta of 0.7 reflects considerably low volatility over this period. Moreover, the stock is trading above various moving averages including the 5-day, 10-day, 20-day, 50-day, 100-day, 150-day, and 200-day averages.
Vodafone Idea shares hit a new 52-week high at Rs 18.42 on January 1, 2024, following a previous low of Rs 5.70 on March 31, 2023.
Financially, the telecom firm reported a widened net loss of Rs 8,738 crore in the second quarter of the current fiscal year ending September 30, 2023, compared to a net loss of Rs 7,596 crore in the corresponding period last year. However, the average revenue per user (ARPU) showed growth, increasing to Rs 142 in Q2FY24 from Rs 139 in Q1FY24 and Rs 131 in Q2FY23. Despite this, the revenue remained flat at Rs 10,716 crore in Q2FY24, identical to the figures reported in the year-ago period.
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