CLSA warns Vodafone Idea share price could drop to ₹5

Even as Vodafone Idea (Vi) is looking to do a follow-on public offer to raise ₹20,000 crore, analysts at CLSA warned that shares of the cash-strapped telecom operator could drop as much as 61 per cent to ₹5, if the company continues to see subscriber churn.

The latest data from telecom regulator, TRAI, reveal Vi reported a loss of one million subscribers to 221 million in February 2024 amounting to a 17-million loss over the past 12 months.

Low capex

Vi’s subscriber loss is due to low capex of ₹1,300 crore over nine months in FY24, down 54 per cent year on year and 93 per cent lower than Bharti Airtel’s India mobile capex of ₹19,300 crore. Meanwhile Vi’s equity raising of up to ₹20,000 crore is pending and will boost capex and enable the rollout of 5G services.

“Beyond capex and 5G rollout, Vi faces a financial crunch in FY26 when annual spectrum and AGR payments of $4 billion per annum will fall due, unless the government converts debt principal to equity at the end of the moratorium. We retain SELL on Vi with a ₹5 target price. Falling subs add risks to our forecasts and also with pending AGR case relief,” CLSA said in a report.

Vodafone Idea shares closed at ₹12.93 per share on the BSE on Wednesday.

Crime Today News | Markets | Commodities | Forex | Stocks

Source | Powered by Yes Mom Hosting
Crime Today News Agency

Crime Today News

Welcome to Crime Today News, your trusted source for timely and unbiased news coverage. Since our inception in 2014, we have been dedicated to delivering the latest updates to our valued readers and viewers across Telangana.

Related Posts