Shares of Vodafone Idea Ltd (VIL) continued their sharp upward run for the fifth straight session in Monday's trade. The stock surged 14.91 per cent to hit a day high of Rs 10.48. At this price, it has gained 35.40 per cent in just five trading days.
Today's sharp rise in the share price came after a news report claimed that the Centre is mulling over adjusted gross revenue (AGR) dues waiver. Bourses BSE and NSE have sought clarification from the telecom company on the report titled, "Vodafone Idea, Airtel shares in focus as govt plans AGR dues waiver". And, a reply from the telco is awaited at the time of publishing this story.
"This (expected AGR) relief, in addition to the recently announced bank guarantee waiver, brightens the chances of Voda Idea's Rs 25,000 crore debt raise and completion of its Rs 50,000-Rs 55,000 crore capex programme through FY27. While this would pave the way for VIL to execute its revival plan, we estimate that the cash drain even with the Rs 11,500 crore per annual potential relief would still be significant in the next few years (with liberal average revenue per user assumptions)," said analysts at IIFL Securities.
However, some analysts raised concerns over the telecom operator's anticipated dip in subscriber base. Centrum Broking's analysts said, "VIL may report a decline of 40 lakh subscribers, sequentially, to 20.1 crore subscribers in the December quarter, with growth in ARPU growth of 5 per cent, quarter-on-quarter (QoQ), to Rs 164 per month. The management commentary on ongoing capex activity would be a key to watch out for going ahead."
Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said, "We are cautiously optimistic on VIL shares for a medium- to short-term perspective. The recent capital infusion and network strengthening would be positive in the medium term. But, the company is still struggling with its subscriber base. We need to look carefully at the ARPU numbers. So, investors with a high-risk appetite should hold the stock."
G Chokkalingam, Founder and MD of market research firm Equinomics Research, said, "If promoters infuse more equity or the company gets any significant write-offs in liabilities, its prospects would further improve. In case, VIL continues to lose customers in a big then it would be a cause of concern."
Technically, the counter traded lower than the 5-day, 10-, 20-, 30-, 50-day and 100-day simple moving averages (SMAs) but lower than the 150-day and 200-day SMAs. The scrip's 14-day relative strength index (RSI) came at 77.72. A level below 30 is defined as oversold while a value above 70 is considered overbought.
The stock saw high trading volume on BSE today as around 16.63 crore shares were last seen changing hands. The figure was way more than the two-week average volume of 6.49 crore shares. Turnover on the counter came at Rs 168.68 crore, commanding a market capitalisation (m-cap) of Rs 69,699.82 crore.
VIL is currently involved in the process of rolling out its 5G services in select areas. The company was formed in 2018 when Vodafone Group Plc merged its India business with Idea Cellular.
Recently, UK-based Vodafone Group said it sold the remaining 3 per cent stake in domestic telecom infrastructure firm Indus Towers for Rs 2,800 crore.
As of December 2024, promoters held a 38.80 per cent stake in the telco.