Even as Vodafone Idea (Vi) is looking to do a follow-on public offer to raise â¹20,000 crore, analysts at CLSA warned that shares of the cash-strapped telecom operator could drop as much as 61 per cent to â¹5, 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
Viâs subscriber loss is due to low capex of â¹1,300 crore over nine months in FY24, down 54 per cent year on year and 93 per cent lower than Bharti Airtelâs India mobile capex of â¹19,300 crore. Meanwhile Viâs equity raising of up to â¹20,000 crore is pending and will boost capex and enable the rollout of 5G services.
âBeyond 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 â¹5 target price. Falling subs add risks to our forecasts and also with pending AGR case relief,â CLSA said in a report.
Vodafone Idea shares closed at â¹12.93 per share on the BSE on Wednesday.
Crime Today News | Markets | Commodities | Forex | Stocks
Source | Powered by Yes Mom Hosting
Crime Today News Agency