Videocon rings in the right tune

It is after a long time that Videocon is back in the limelight and is amongst the top gainers on the bourses. The stock price, intra day rose almost 10% at Rs.142 and it has now settled at Rs.137 levels. Volumes are up over 3 times. Its 52-week high stands at Rs.199.

The stock is in the news after it announced yesterday that it had signed a deal with Idea Cellular to sell its spectrum in Gujarat and Uttar Pradesh West circles for Rs 3,310 crore. It had acquired this spectrum in 2012 for Rs.1329 crore of which it had made an upfront payment of Rs.438.57 crore.

The pact for telecom circles is for a quantum of 2×5 MHz contiguous blocks of 1800 MHz in each service areas, with a right to use spectrum until December 2032. Idea will use the spectrum for deployment of 4G (LTE) services in these areas.

Videocon has said it will soon be announcing a similar deal for its UP East and Bihar circles and is looking at valuations of around Rs.3500 crore.

Some four Indian telecom companies have shown interest for buying this spectrum. The company hopes to use the cash raised from all this spectrum in bringing down its debt and for business development.

The company has established itself pretty well in Haryana and MP and it is planning to launch 4G services very soon.