Indian stock markets have been on a joyride for more than a year now. The headline indices Sensex and Nifty have surged more than 30% in the last 13-month period with some blue-chip stocks such as Tata Steel, Maruti Suzuki, Reliance Industries, Bharti Airtel, HDFC Bank, Yes Bank, IndusInd Bank rising up to 90%. If last three-month performance is taken into consideration, Sensex and Nifty have appreciated up to 8% while a blue-chip telecom stock had risen about 47% in the corresponding period. We bring to you a blue-chip telecom share under Rs 150 which had risen 47% in last 3 months to buy and gain 70% in next three months.
Shares of Aditya Birla group’s telecom company Idea Cellular have risen 47% in the last three-month period. The research and brokerage firm HDFC Securities has given a target price of Rs 185 which implies an upside of 70% from the current market price of Rs 109.05. HDFC Securities has given a time horizon of about 3 months to reach the target price and has given a stop loss of Rs 84. “Traders could start creating long positions between Rs 95 and Rs 111 level for sequential targets of Rs 130 followed by Rs 185,” HDFC Securities said in a report.
Recently on Friday last week, shares of Aditya Birla group’s telecom company Idea Cellular gained nearly 14% intraday after the company presented a plan to raise up to Rs 6,750 crore which is inclusive of Rs 3,250 crore preferential allotment of equity shares. Idea Cellular is mulling to raise up to Rs 6,750 crore which will alter the shareholding of promoter group in the company. The board of directors of Idea Cellular approved to issue as much as 32.66 crore shares on a preferential basis to the promoter group entities and constituted a committee to evaluate potential routes for raising further capital of up to Rs 3,500 crore.
Following the development, the stock of Idea Cellular jumped as much as 13.73% to the day’s high of Rs 118.9 on NSE on Friday last week. The board of directors of Idea Cellular approved an issuance of 32.66 crore equity shares of face value Rs 10 at a price of Rs 99.5 on a preferential basis to the promoter group entities Birla TMT Holdings Pvt Ltd, Elaine Investments Pte Ltd, Oriana Investments Pte Ltd, Surya Kiran Investments Pte Ltd. The total money mobilised through the preferential allotment would be Rs 3,250 crore.
The equity issue is subject to shareholders and other regulatory approvals. The extraordinary general meeting of shareholders is to be convened on 30 January 2018. The issue is expected to complete by early February 2018 post which the shareholding pattern of the promoter group in Idea Cellular will increase to 47.2% from existing level of 42.4%.