Vodafone Idea shares jump 15% to hit 52-week high; here's what tech charts indicate

Shares of telecom operator Vodafone Idea Ltd (VIL) resumed climb in Friday's deals after a single-day halt. The stock surged 14.92 per cent to hit a one-year high price of Rs 10.40 against its previous close of Rs 9.05. The scrip has gained over 20 per cent in the past one month and a little more than 44 per cent in six months. Around 16.65 crore shares changed hands on BSE today. This was way more than the two-week average volume of 5.96 crore shares. Turnover on the counter stood at Rs 164.14 crore, commanding a market capitalisation (m-cap) of Rs 48,582.33 crore.

"The stock is bullish but also overbought on the daily charts with next resistance at Rs 11.80. Investors should be booking profits at current levels as a daily close below support of Rs 9.15 could lead to target of Rs 7.5 in the near term," said AR Ramachandran from Tips2trades.

"The stock has already given an 82 per cent return in five months. Additionally, it is trading way above all major exponential moving averages, making it vulnerable to mean reversion. As we advance, support is expected near Rs 9, followed by Rs 8.5. Resistance is expected near Rs 11, followed by Rs 12," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.

The counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 79.33. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 1.47 against a negative price-to-book (P/B) value of 0.58.

The scrip has an analyst target price of Rs 6, Trendlyne data showed, suggesting a potential downside of 44 per cent. It has a one-year beta of 0.81, indicating low volatility on the counter.

VIL recently said it has extended the redemption period of 8,000 optionally convertible debentures (OCDs) – out of the 16,000 OCDs issued to American Tower Corp's India unit (ATC Telecom Infrastructure Pvt Ltd) – to 18 months from the allotment date, instead of the previous 6-month deadline.

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"The company had informed the stock exchanges about issue and allotment of captioned OCDs to ATC, post approval of shareholders in general meeting. We wish to inform you that, the company and ATC have agreed to extend the period of redemption of 8,000 OCDs from 6 months, from the date of allotment of first tranche of OCDs (which was falling due on August 28, 2023), to 18 months from the date of allotment, subject to certain conditions as mutually agreed," VIL stated.

VIL CEO Akshaya Moondra, in an earnings call, said, "In the last 2 months, our discussions with multiple groups of investors on both equity and equity-linked instruments have progressed. It has gained a lot of momentum, and we have seen a very good progress in the last couple of months, particularly in the last 1 month where some of these discussions have started progressing to a level of due diligence or proposals being discussed with these investors. We are making good progress, and we expect to conclude these discussions in the coming quarter."

The CEO also mentioned, "We already disclosed that the promoters have already given support for Rs 2,000 crore of equity, some external equity needs to be tied up. And with that, the bank funding will also be tied up. So, we expect to conclude all these funding arrangements in the coming quarters. And once that happens, then we will be able to continue our investments."

Also, the debt-ridden company reportedly said the it plans to clear about Rs 2,400 crore of dues to the government by September. The telco recently cleared pending dues of licence fees and spectrum usage charges of about Rs 450 crore for the March quarter of 2022-23.

Separately, the firm has signed a binding term sheet with Route Mobile (UK), wholly-owned subsidiary of Route Mobile, for VIL's International A2P SMS traffic. Route Mobile would be VIL's platform provider for International A2P SMS Services for a period of 24 months, it mentioned.

Meanwhile, Indian equity benchmarks were seen trading higher today, led by gains in metals, automobile, banks and energy stocks.

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