Shares of Vodafone Idea Ltd (VIL) resumed climb in Friday's trading session after a single-day pause. The stock was last seen up 1.93 per cent higher at Rs 16.38. At this price, it has given multibagger returns by rallying 106.82 per cent in the past one year.
VIL Board has approved the issuing of shares worth up to Rs 2,458 crore on a preferential basis to Ericsson India and Nokia Solutions. The transaction will involve issuing of shares up to 1,66,08,10,804 or 166.08 crore fully paid-up equity shares of face value of Rs 10 each in one or more tranches.
Out of this, up to 1,02,70,27,024 or 102.70 crore equity shares each at an issue price of Rs 14.80 per equity share (including a premium of Rs 4.80 per equity share) will be issued to Nokia Solutions and Networks India Private Limited, a non-promoter of the company. The transaction will amount to Rs 1,520 crore.
And, Ericsson India, also a non-promoter, will be issued up to 63,37,83,780 or 63.37 crore equity shares at an issue price of Rs 14.80 per equity share (including a premium of Rs 4.80 per equity share). The transaction will be worth Rs 938 crore.
Analysts largely remained positive on the counter. On technical setup, support could be seen at Rs 13 level for VIL's stock.
"Tariff hike expectations may work in favour of the entire telecom sector, including Vodafone Idea. When that happens, it will have a huge positive impact on the telco's cash flows. With increased ARPU (Average revenue per user), a lot of stress on the balance sheet -- in terms of spectrum payouts and leverage servicing -- gets addressed. With that being said, debt remains an overhang," Mayuresh Joshi, Head-Equity Research at William O'Neil India told Business Today TV.
"On technical charts, if the stock sustains Rs 16-17 levels in the next couple of weeks, then we can see a further upmove. On the higher end, we can expect target prices of Rs 20-23 levels in the upcoming period. Keep a strict stop loss placed at Rs 13," said Kiran Jani, Head of Technical Research at Jainam Broking.
VIL's consolidated loss after tax widened to Rs 7,675 crore during the fourth quarter (Q4 FY24). Consolidated revenue, however, rose 0.7 per cent on a year-on-year (YoY) basis to Rs 10,607 crore in Q4 FY24.
VIL's 4G subscriber base grew to 12.63 crore as on March 31, 2024, from 12.26 crore a year ago. But its overall subscriber base fell about 6 per cent to 21.3 crore.
The telco's ARPU, a key performance metric for telecom firms, rose to Rs 146 from Rs 135 a year earlier.
The firm has successfully raised a total of Rs 18,000 crore from its follow-on offering (FPO). It is planning to roll out its 5G services in select areas.
Vodafone Idea was formed in 2018 when Vodafone Group merged its India business with Idea Cellular. As of April 23, 2024, promoters held a 36.87 per cent stake in the company.