15 hours ago
Shares of Vodafone Idea Ltd. gained as much as 12% on Monday, April 21, after the government officially raised its stake in the beleaguered telecom operator to 48.99% from 22.60% earlier.
Vodafone Idea recently converted the spectrum dues worth over ₹36,000 crore it owed to the government, into equity shares.
Although the government will not be classified as a promoter, nor will Vodafone Idea turn into a PSU, it will be the single largest shareholder in the company.
Meanwhile, the cash-strapped telco continued to report net user losses. Vodafone Idea lost 13.4 lakh users, according to data released by the Telecom Regulatory Authority of India on Monday.
Reliance Jio Infocomm Ltd. and Bharti Airtel Ltd. added mobile subscribers in January.
Bharti Airtel led additions during the month with a net gain of 16.5 lakh users, followed by Jio, which added 6.86 lakh subscribers. BSNL lost 1.52 lakh.
Global brokerage firm Citi has a 'Buy (High Risk)' rating on Vodafone Idea, with a price target of ₹12.
Citi remains positive on both Vodafone Idea and Indus Towers.
In an investor presentation earlier this month, Vodafone Idea said that price increases and subscriber additions will be key drivers of revenue growth.
Given inflationary pressures, prices need to catch up, the debt-ridden telecom service provider said.
There is significant headroom for ARPU (Average Revenue Per User) growth, as usage has increased multifold, but ARPU has not kept pace. The company added that customers' ability to pay higher tariffs is already established.
Further price increases are necessary to generate reasonable returns and support future investments.
The telco's focus going forward will be on driving ARPU improvement and retaining customers.
Vodafone Idea has also announced a capex plan of ₹50,000–55,000 crore over the next three years.
Of the 21 analysts that track Vodafone Idea, 11 of them have a 'Sell' rating on the counter, while five analysts each have a 'Buy' and 'Sell' recommendation.
Shares of Vodafone Idea Ltd. are currently trading 10.66% higher at ₹8.10.
