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regular-article-logo Tuesday, 25 June 2024

Vodafone Idea shares extend rally over expectations of fund infusion from promoters

The telco ended with gains of more than 6 per cent after jumping almost 15 per cent in intra-day trades. The stock price has more than doubled in the last six months on account of the expected funding from the promoters

Our Special Correspondent Mumbai Published 02.01.24, 11:51 AM
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The shares of Vodafone Idea (Vi) extended their rally on Monday on expectations the much-awaited fund infusion from its promoters is imminent.

The telco ended with gains of more than 6 per cent after jumping almost 15 per cent in intra-day trades. The stock price has more than doubled in the last six months on account of the expected funding from the promoters.

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On July 3, Vodafone Idea ruled at Rs 7.53 on the markets; the stock soared almost 126 per cent to Rs 16.99 on the BSE on Monday.

This came after it soared to a 52-week high of Rs 18.42 during the day. Vi now has a market cap of Rs 82,706.79 crore.

Investors took their positions in the stock on the possibility of Aditya Birla Group and Vodafone plc — the two promoters — ploughing Rs 2,000 crore into the company.

The banks will follow with fresh support to the beleaguered telco which continues to post losses and see subscriber churn.

After the company declared its second quarter results, CEO Akshaya Moondra said in a call with analysts that the company expects fund infusion to come from the promoters.
They were expected to bring in the funds by the end of the October-December quarter.

“In the last quarter, we had gotten a letter from the promoters that they will support us to the extent of Rs 2000 crore. Till date, they have not contributed anything. We had gotten some bank funding to tide over the short-term mismatch that we had in the last quarter,” Moondra told the analysts on October 30.

“The promoters’ commitment is there. They have said that they will support as and when required. And we expect that this promoters’ contribution should also come alongside the tie-up with the external investor.’’

Moondra indicated the infusion from the promoters along with the external funding can also happen together. “Most likely this will conclude in this quarter. That’s our expectation,’’ he added.

Vodafone Idea had lost 7.5 lakh mobile subscribers in September, which brought down its wireless user customers to 22.75 crore. The company had posted a consolidated loss of Rs 7,595.5 crore in the second quarter ended September 30, 2023.

It had posted a loss of Rs 7,132.3 crore in the same period a year ago and a loss of Rs 7,840 crore in the first quarter ended June 30 2023.

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