Vodafone Idea Shares Soar as Government Boosts Stake
Government Ups Stake in Vi to Nearly 49%
On Tuesday, Vodafone Idea’s shares jumped by 19.41%, touching Rs 8.15 on the BSE. This surge follows the government’s move to convert Rs 36,950 crore of the company’s spectrum payment dues into equity, enhancing its financial standing and lowering statutory obligations.
- Government’s stake in Vi will grow to 48.99% from 22.6%
- Private promoters Vodafone Plc and Aditya Birla Group will see their holdings drop to 16.1% and 9.4% respectively
- This conversion will offer crucial cash flow support to Vi
Government Aid for Struggling Telecom Company
Analysts point out that Vi, currently operating at a loss, needs to pay Rs 29,000 crore in government spectrum and adjusted gross revenue (AGR) dues by the second half of FY26. These obligations will now shrink to Rs 11,000 crore. Starting FY27, the annual payment requirement will decrease to Rs 17,000 crore from Rs 43,000 crore.
Vodafone Idea Share Price Outlook
Citi Research has retained its buy/high risk rating on Vodafone Idea after the government’s decision to raise its ownership to 48.99%. The firm has set a target price of Rs 12 per share, indicating a 76% potential rise from the last closing price.
- Average target price of Rs 8 for Vodafone idea shares
- Majority recommendation is to ‘Sell’
- Stock trades below all major Simple Moving Averages
