Vodafone Idea shares gain 10% on KM Birla's return to board

KM Birla had resigned from his position as the company's chairman back in 2021 when Vodafone Idea's financials were under a turmoil.

Shares of the cash-strapped telecom company, Vodafone Idea notched around 10 percent gains in early trade on April 21 after Kumar Mangalam Birla made a comeback to the company's board as an additional director.

Birla had resigned from his position as the company's chairman in 2021 when Vodafone Idea's financials were under a turmoil. Following his departure, the company's poor performance over the quarters saw its shares slip to a 52-week low of Rs 5.70.

However, investors were cheered by the return of KM Birla and shares of the company reacted positively to the news, along with a flux of strong volumes. At 10.26am, shares of Vodafone Idea were trading at Rs 6.50, up 7.44 percent on the National Stock Exchange.

Around 18 crore shares of the company changed hands on the exchanges so far, as against the one-month daily traded average of nine crore shares.

The cash-trapped company has been struggling to keep up with its finances as it has been consistently losing its market share over the quarters.

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Prior to the conversion of nearly $2 billion of dues into equity by the Indian government in February, Vodafone Idea had a net debt of Rs 223,000 crore ($27.18 billion), making the government the largest shareholder in the company.

In 2021, the Indian government authorised a bailout plan for telecom companies under financial distress. This plan enables these companies to transform their interest on deferred adjusted gross revenue, which is owed to the government, into equity.