Telecom Booster Dose Given to Vodafone Idea : Vodafone Target – 21

The much-awaited telecom relief package has been announced by the cabinet on Wednesday and given new life to the struggling telecom company i.e Vodafone Idea. Vodafone Idea, promoters said that the telecom relief measures announced by the cabinet will ensure “healthy growth” of telecom sector. These reforms will bring smile of 1.3 billion people and shareholders. Following complete details of the telecom relief package and AGR moratorium are appended below:-

Structural Reform

(1) Rationalization of AGR: Non-telecom revenue will be excluded on prospective basis from the definition of AGR.

(2) Bank Guarantees rationalized: Big reduction in Bank Guarantees requirements (80%) against License Fee and other similar Levies. No requirements for multiple Bank Guarantees in different Licensed Service Areas regions in the country. Only One Bank Guarantees will be sufficient.

(3) Interest rates rationalized/ Penalties removed:    From 1st October, 2021,Delayed payments of License Fee /Spectrum Usage Charge will attract interest rate of SBI’s MCLR plus 2% instead of MCLR plus 4%; interest compounded annually instead of monthly; penalty and interest on penalty removed.
(4) Spectrum Tenure: In future Auctions, tenure of spectrum increased from 20 to 30 years.
(5) Surrender of spectrum will be permitted after 10 years for spectrum acquired in the future auctions.
(6) No Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions.
(7) Spectrum sharing encouraged- additional SUC of 0.5% for spectrum sharing removed.
(8) To encourage investment, 100% Foreign Direct Investment (FDI) under automatic route permitted in Telecom Sector. All safeguards will apply.

Procedural Reforms
(1) Auction calendar – Spectrum auctions to be normally held in the last quarter of every financial year

(2) Know Your Customers (KYC) reforms: Self-KYC (App based) permitted. E-KYC rate revised to only One Rupee. Shifting from Prepaid to Post-paid and vice-versa will not require fresh KYC.

For Free Opening of Demat & Trading  Account use following Link are appended below : –

Zerodha : https://zerodha.com/open-account?c=ZMPOULUpstox: https://upstox.com/open-account/?f=HBRRAstha: https://asthatrade.com/?c=VwoCjAngel Broking : https://tinyurl.com/yx9gw7dbOur Views on stock

As on date, Vodafone Idea trading at Rs.8.95 at NSE. NO (R) NO Fresh Buy in this stock right now, but if you still holding with short term view keep trailing stop loss of Rs. 6.25. We think after telecom relief, company may back on track but still fund raising problem is not solved and  it will take more time specially Q3 (Oct – Dec 21) Quarter Earnings will be turnaround story so my message to all retail investors need to be careful and hold the share with trailing stop loss as per your risk appetite. Our target is 21/-  intact for the financial year 2021.

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