Vodafone-Idea, post SC Verdict - Angel Broking

Mr. Keshav Lahoti, Associate Equity Analyst, Angel Broking Ltd

"On September 1, Vodafone Idea stock corrected by 13.2% as the Supreme Court allowed a 10 year staggered payment timeline to pay AGR dues against 15-20 years anticipated by the market. On September 2, Vodafone Idea rallied by 11.9% on Company announcement that board of directors is scheduled to meet on September 4 to evaluate all proposals to raise funds. This clearly indicated that the Company is not planning to shut the shop post the Supreme Court verdict. Today also stock is trading up by 11% on the basis of media reports that retailer Amazon and Verizon, one of the largest communication technology companies may invest more than $4 billion (more than half of the pending AGR dues) for stake in the Company. If this report turns out to be true then certainly Vodafone Idea will survive in the industry for at least next few years. So this will solve the first problem of the Company i.e. paying AGR dues for next few years. The second problem Company needs to fix is maintain its losing revenue market share by developing proper strategy. The third hurdle for the Company is ARPU hike in the industry. Vodafone Idea and Bharti Airtel are in favour to hike tariff plans steeply, although Jio is not ready to hike its plan rates. So Vodafone Idea and Bharti Airtel are not able to hike tariffs as it will lead to loss in subscribers for them. We believe if these three actions happen then Vodafone Idea will survive: successfully raising the desired quantum of funds, preventing its losing revenue market share and ARPU hike in the industry."

Shares of Vodafone Idea Ltd was last trading in BSE at Rs.12.56 as compared to the previous close of Rs. 9.91. The total number of shares traded during the day was 358274474 in over 181162 trades.

The stock hit an intraday high of Rs. 12.88 and intraday low of 10.45. The net turnover during the day was Rs. 4104590180.

Source : Equity Bulls

Keywords